Top ten tips for becoming a landlord
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
Becoming a landlord, renting out your property and moving somewhere else may help you manage debts.
Here are some tips on becoming a landlord and renting out your property:
1. Speak to your mortgage lender
You may not be allowed to rent out your property without their permission. If you don’t ask your lender, they could start repossession proceedings against you once they find out that is what you are doing.
2. Draw up a proper tenancy agreement
You can buy a tenancy agreement online or from a stationers firm, otherwise you can get a solicitor to draw one up for you. If you are going through a letting agent they may take care of the agreement on your behalf, but by becoming a landlord you will ultimately be responsible for complying with the terms of the agreement yourself.
Read the agreement carefully. It is essential that you understand the legal responsibilities you will have as a landlord, and how the law protects both you and your tenants.
Even if you don’t give your tenants a written agreement at all, they will still have rights under the law. See our page on tenancy agreements for more information.
3. Get references from your tenants
Proper references from your tenants’ employers and/or previous landlords could help to ensure that they are responsible people. This should help to reduce the possibility of the rent not being paid, or damage being caused to your property when you become a landlord.
4. Make sure the deposit is properly protected
It is important to get a deposit from any potential tenant to cover against any property damage or unpaid rent. Becoming a landlord means that you are legally required to place the deposit in a Government-approved tenancy deposit scheme.
If you don’t, you could be fined an amount up to three times the original deposit, plus the deposit itself. This will be paid to the tenant as compensation. Not protecting the deposit will also make it much harder for you to evict the tenants if there are any problems later on. There are three different government-approved schemes available:
5. Get an energy performance certificate (EPC)
To become a landlord and rent out your property you will need to have an energy performance certificate, or EPC, which will usually cost you around £100. This will allow anyone who is interested in renting out the property to see how energy efficient it is.
If you rent out the property without producing an EPC you can be fined by the trading standards department from your local council.
6. Check your building and contents insurance policy
Some insurers will increase the cost of your premiums if you rent out your property. However, you are still strongly advised to inform them. If you don’t, your insurance could become invalid.
7. Protect the health and safety of your tenants
Becoming a landlord means you will be responsible for gas and electrical safety in the property. Your gas appliances must be checked every year, and you must give tenants a copy of the gas safety certificate. All gas engineers must be registered with the Gas Safe Register (which replaced the CORGI scheme). It is also good practice to have an electrical inspection carried out and to test any electrical appliances you supply. To find registered contractors,visit:
- the Gas Safe Register website and/or
- the Electrical Safety Council website.
8. If the property will be shared, find out whether you need a license
If the property is to be rented to more than one household who will share facilities (eg a number of bedsits sharing bathroom or kitchen facilities) it may be classed as an house in multiple occupation (HMO). If this is the case, you may be required to register with the council and get a license. This will be mandatory if the property is at least three storeys high and contains five or more tenants living in two or more households.
If your property does require a license and you do not get one, you can be prosecuted by the council. You may be fined up to £20,000 and it will be much harder for you to evict your tenants if there are problems later on.
9. Protect the property from fire
When becoming a landlord you should ensure that the property has a means of escape in the event of a fire, and that fire alarms are fitted. If your property is a house in multiple occupation (see above) you will have extra fire safety responsibilities.
10. Make sure that you declare any income for tax and benefit purposes
Becoming a landlord may mean you may need to pay tax on the income you receive from renting out your home, so it is important that you declare this – particularly if you are receiving any benefits as it could affect the amount you receive. If don’t report your rental income, you are likely to have to repay any benefits that you should not have been paid, and you could even be prosecuted.
Get advice - Use our directory to find an advisor in your area who should be able to give you more information on your obligations. For more information see our pages on renting out your home, and renting out a room.
