Thinking of Letting a Property in Brentford, Chiswick, Ealing, Isleworth or Acton?
Becoming a landlord is a potentially lucrative venture, but not always a straightforward one. It takes lots of planning, time and investment before you will see the return. If you are prepared to devote all of that, then this ‘Advice for Landlords’ guide is for you. Here we break down the most important things to consider when letting a property in Brentford, Chiswick, Ealing, Isleworth or Acton.
Arrange your Finances
Buying any property is a huge investment and you first need to get your finances in order to make it a success. There are some key costs involved with becoming a landlord that will need to be paid out before and during any tenancy:
- Buy-to-let costs: Taking out a buy-to-let mortgage means paying monthly repayments, which are likely to be your largest financial commitment. If you can put down a large deposit upfront, this will lower the ongoing payments. Remember, taking out a variable rate mortgage may be favourable now, but rates can change in-line with interest rates over time.
- Refurbishment costs: The property will have to be redecorated, or even refurbished, every few years to keep it looking presentable and in good condition. How much this will cost depends on the scale of work required and if any major alterations are made, but it will probably be at least a couple of thousand every five years or so.
- Landlord insurance: Your mortgage lender will likely want you to take this out as part of the deal and it’s a good idea to have protection for the property. You can choose the type of insurance you prefer, be it just for the contents or the building itself, but a good policy can usually offer protection in the event of any unpaid rent.
- Income tax: Monies earned from letting out a property must be taxed like any other type of income. This can be calculated after ‘allowable expenses’ have been deducted such as letting agent fees, landlord insurance, legal fees, maintenance and repair costs and mortgage interest payments.
Find the Right Property to Buy
To get the most from your investment it pays to do thorough research on any property you are interested in to ensure there is long-term value. This includes:
- Market research: Look at the local area using online property portals to get an idea of the types of rental houses usually available to rent. It also helps to establish relationships with local estate agents, as their property expertise can prove to be invaluable.
- Decide on property type: Purchasing a new-build home will mean moving into a ready-made property with less costs involved, although it will often come with a higher price tag. Opting for an older property can be cheaper in some instances, but there may be more investment needed to update the building to make it ready for letting. This could be anything from changing fixtures and fittings, to installing better insulation and more.
- Consider the tenants: The most important consideration to take into account when looking for a property is what type of tenant you would like to live there. Young professionals may want modern, furnished places nearby to local amenities, while families may be searching for something larger in a quieter area with good transport links for schools.
- Keep to your budget: Calculate how much rent you want to charge to get an idea of the yield you would like to receive, before setting a budget you will stick to. It’s important to think analytically about any potential purchases and crunch the numbers so it makes financial sense. Take your time, negotiate and only pay a price you can afford that will give you the profits you expect.
Choose a Letting Agent
Your choice of letting agent could make all the difference between buying the right or wrong property to let. Working with the right letting agent offers a number of benefits, such as:
- Providing insightful up-to-date advice about the local property market
- Assistance in helping you to maximise rental yields
- Knowledge about current landlord-related laws and legislations
- Vetting tenants and carrying out referencing procedures to ensure their credibility
- Dealing with all relevant paperwork related to the property
- Collecting rent and dealing with any outstanding amounts
- Property management services throughout the duration of the tenancy
- Ability to deal with difficult tenancy situations and evictions
When it comes to choosing the letting agent you want to work with, ensure they are a member of the Property Ombudsman and UKALA. Also do your research online by looking at testimonials and reviews from previous landlords. This will give you a strong indication of the agent’s professional capabilities.
Determine your Rental Price
You want to get the best possible return on your investment which means settling on the right rental price for the property. To strike the right balance you need to cover all costs associated with the property (see above) while factoring in the profit you would like to make.
On top of that, conduct your own research to see what similar properties are charging in the area. Location plays a big part in the rent you can charge. The general rule is that the nearer to the centre of London the property is, the higher the rent will be as it attracts more affluent tenants. Also think about the type of amenities that are nearby and if the flat will be furnished. Will pets be permitted? All of these things play into the monthly rental costs.
This is where letting agents can also help, using their experience in the property market to offer advice on the right level of rent to charge. Organising a rental valuation with a local letting agent can make this process a lot more straightforward and far less stressful.
At Thorgills, we offer free rental valuations for those looking to let property in Brentford, Chiswick, Ealing, Isleworth and Acton. If you would like to know what your rental property is worth, book a rental valuation with one of our expert letting agents.
Find suitable tenants
There are some key points to cover when looking for suitable tenants for your property. This includes things like:
- Checking the tenant is legally able to rent in the UK. Original documents must be provided and not copies. Landlords cannot discriminate based on race, gender, religion, nationality or religion.
- A tenant’s yearly income should be at least 2.3x the annual rent. For example, a £15,000 annual rent charge would require a wage of £34,500. Their rent should not just cover rent costs but also allow them to live comfortably.
- Background checks to verify the tenant’s previous landlords, credit history, work references and a basic affordability test.
- Secure a 5 week deposit along with the first month’s rent upfront before the tenant moves in, along with a direct debit for future rent payments to provide some security.
- If a tenant wants a 12-month tenancy or longer and are employed full-time by a UK company then these should be the preferred option.
- Tenants that communicate well and are transparent throughout the whole process are far less likely to cause any major issues further down the line.
- Most importantly of all, listen to your gut instinct. Don’t rush into making a decision you may regret later and if you don’t have a good feeling about the tenant, don’t agree to becoming their landlord.
Deposit Scheme and Tenancy Agreement
You should provide the tenant with a tenancy agreement that lays out the details and responsibilities of both parties while they are living in the property. It should include things like:
- Names of the people involved
- Rental costs and method of payment
- The full property address
- Start and end date of the tenancy
- Deposit amount and where it will be held
- Tenant and landlord responsibilities
The deposit must be placed in a tenancy deposit protection scheme where it has to remain until the end of tenancy. It should be put there within 30 days of receipt and full information about the scheme must be provided to the tenant.
Prepare your Property
It is the landlord’s responsibility to make the property a liveable space for the duration of the tenancy. This involves ensuring all of the agreed fixtures and fittings are in place and in good working order. If the property is furnished these items must also be put into position.
The inside of the property should be clean and presentable, with any cracks, holes and repairs all taken care of. If there is a front and/or back garden, this should be tidied and cleared for the tenant to use.
Redecorate the property with new wallpaper, paint and carpeting (or other type of flooring) if this hasn’t been done in a while.
Know your Responsibilities as a Landlord
Aside from providing a tenancy agreement and using a verified deposit scheme, there are some other important legal responsibilities to be aware of.
This generally relates to safety, maintenance and repairs throughout the tenancy, which means taking care of flooring, windows, roofing and plumbing issues that may occur.
As the landlord you must also install a wired smoke alarm on each floor of the property, along with carbon monoxide detectors. All furniture must meet fire safety standards and a gas safety certificate for each appliance should be made available.
The property must legally have an EPC rating of at least E, and a certificate will have to be provided to the tenant upon moving in. Ongoing responsibilities include a gas safety check every 12 months and an electrical check every 5 years.
How to End a Tenancy
When you want a tenant to leave the property, this has to be managed in a particular way. If you would like them to leave without giving a reason the following conditions must be met:
- Give the tenant at least two months’ written notice with a fixed leaving date
- The deposit has remained protected in the scheme throughout the tenancy
- They have lived in the property for a period of at least 6 months after signing the tenancy (a tenant must have lived in the property for 4 months before notice can be served)
- Either a periodic or fixed-term tenancy has reached its conclusion
While the above is the most common way a tenancy agreement is ended, there are a number of other circumstances that can be read in more detail here.
If you are thinking of letting property in West London, get in touch with our expert letting agent team for more information on our landlord services in Brentford, Chiswick, Ealing, Isleworth and Acton.