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Letting out your Property: How to get started
23 June 2016 1641 Views
While the buy-to-let market may have experienced a spectacular rise and fall either side of April's stamp duty hike, this remains a viable entity for investors and aspiring landlords. After all, the market is likely to balance out once the new stamp duty rates are accepted as standard, while proposed taxation changes facing buy-to-let landlords will not come into play until next April.
When you also consider that the cost of renting is expected to increase by an annual average of 7.5% over the course of the next decade, now may be the ideal time to take your first steps as a private landlord.
Letting out your Property: The First considerations
With this in mind, let's take a look at the first considerations you will need to take as an aspiring landlord. Consider the following: -
Get a Buy-to-let mortgage and determine your Tenancy type
We have already touched on the fact that buy-to-let owners will pay an increased 3% stamp duty tax, but they will also be required to secure a specific type of mortgage. The rates and terms of this mortgage will differ from a standard contract, so be sure to review these in detail and ensure that the agreement is in place before proceeding.
When considering the letting of your residential home, you should also know that the tenancy will automatically be categorised as an AST (Assured Shorthold Tenancy). This assures you a guaranteed right to reclaim your property after six months, while it also stipulates fair market rent and repossession guidelines. While you can choose another type of tenancy, this must be agreed beforehand with the tenant and presented in the form of a written contract.
Enter the Deposit Protection scheme
Today's landlords must use a tenancy deposit protection scheme, and there are absolutely no exceptions to this rule. This safeguards the tenant's agreed deposit monies, while also offering guidelines on how to resolve potential disputes at the end of the tenancy. You must place these funds into the scheme within 30 days of receipt, while also notifying the tenant about their rights. These funds will then remain untouched until the tenancy is up, at which point you will have the right to either refund this in full or withhold some depending on the state of the property as a whole.
Property care and maintenance
With a property, the right mortgage and a tenancy agreement in place, the next step is to determine how you want to manage your property. While you can take on the task of maintaining the property, chasing rent and responding to tenant queries, for example, this can be time-consuming and almost impossible if you also hold down a full-time job.
To avoid this, you can partner with an online letting agent. These outlets operate for a fixed fee, while they handle all aspects of property management from the discovery of viable tenants to the handling of ongoing repairs and disputes. Although this requires a recurring financial commitment on your behalf, this is a transparent sum and one that can save you considerable time and money as a landlord!