Accidental Landlord? - A Guide To Renting Out Property
The current static residential market in some areas has created a large number of accidental landlords. More houses are being rented out as owners find themselves having to move without being able to sell.
The additional income can be welcome but there are a couple of issues you should be aware of. Firstly, it is well worth investing in a formal tenancy agreement. If you rent your property via a letting agent (on a managed or tenant find only service) they will most likely deal with this for you. If you find your tenant through informal means then we can provide you with a tenancy agreement. The tenancy agreement sets out the rights and obligations of you and your tenant. No one likes to think about worst case scenarios but you have much greater protection in the eventuality that you need to evict your tenant with a tenancy agreement than without one.
You should also consider your tax position. You must inform HMRC if you start receiving income from renting out a property and you may need to complete a tax return if you do not already do so. You will be able to deduct some of your expenses but this may not include all of your mortgage repayments. Only mortgage interest payments may be deducted whereas repayments towards the capital may not. Further information from HMRC can be found at https://www.gov.uk/renting-out-a-property/paying-tax
If you have a mortgage you should seek the consent of your mortgagee before renting out the property. Most mortgagees' terms and conditions prevent renting out your property either at all or for longer than 12 months without their consent. They may require you to switch to a “buy to let” mortgage which often comes with a higher interest rate.
You should notify utility providers and be aware that you will be liable for any standing charges and the council tax until your tenant moves in. Properties that were empty used to be exempt from Council tax but this has now changed.
By law, landlords have an obligation to make any residential property they rent out gas safe. The following tips can help you make sure you are compliant:
- Have an annual gas safety check: All gas fittings and appliances in your rental property need to be checked every 12 months. Inspections should be arranged at least a month in advance of the expiry date as these need to be arranged with your tenant.
- Only use a Gas Safe registered engineer: All gas work you have carried out in your rental property, including gas safety checks, must be done by a Gas Safe registered engineer.
- Provide your tenants with a copy of the gas safety record: Provide your tenants with a copy of the gas safety record which confirms the gas appliances have been checked and are safe.
- Show your tenants how to turning off the gas supply: You are obliged to show your tenants how to turn off the gas in an event of a gas leak.
Posted on 09/24/2014 by Ortolan