Top tips for letting a property

Becoming a landlord and renting out a property is a great way to generate passive income whilst also enjoying potential long-term profits, as the price first paid for the property will increase over time. Whether you're a first-time landlord or adding to an existing portfolio, here are 10 tips to help you navigate the process with confidence.

It is sensible to be well prepared in advance. The better the condition of a property when it is first released for rent, the more interest it will attract, and a higher rent is likely to be achieved. Also, the greater the demand, the more likely it is to let quickly. Landlords are also encouraged to undertake any repairs that may be required and, ideally, redecorate throughout prior to marketing. Even relatively small issues, such as leaking taps or broken tiles, should be addressed in advance.

If redecorating, it is advisable to use neutral colours, as they appeal to the majority of tenants. A lick of paint throughout can go a long way to making the property feel fresh and bright. Remember, first impressions are lasting impressions, so when tenants view for the first time, they are likely to form their opinions at that point about whether to proceed and make an offer.

The vast majority of properties are actually let unfurnished, as many tenants have been renting for a long period of time and already own a considerable amount of their own furniture. Where furniture is in place, it is sensible to remove it before releasing the property to the market. Where this is unavoidable, then any furniture should be modern and in good condition. In the case of seating and beds, etc, these must carry the relevant fire safety labels as required by law.

Before letting a property, a landlord should familiarise themselves with their legal obligations. Some examples are shown below:

Adhering to the general responsibilities of a landlord not only protects the landlord as the owner, but also their tenants. Failing to comply can result in landlords facing legal action and costly penalties. A competent, suitably qualified letting agent is best placed to provide relevant advice. They can also provide ongoing updates as and when amendments are made to existing lettings-based legislation so as to ensure continuous compliance.

The type of insurance typically in place for most residential homes would not be acceptable for a rented property. Instead, specific landlord-based insurance is required. Ideally, this should be in place as soon as a landlord acquires the property and not just when tenants move in. The types of cover can vary slightly between providers, so it is definitely worth landlords doing their homework in this regard to make sure that the kind of cover they finally decide upon is adequate for their needs.

Always seek appropriate advice from a letting agent who has detailed knowledge of the geographical area within which the relevant rental property is located. They should also have been established in the area for a reasonable period of time and be able to demonstrate a proven track record, specifically within property rentals.

It is sensible to retrieve 2 or 3 valuations from different agents initially, but remain mindful that some may be tempted to overprice the property purely to win the business. Of course, a landlord will want to achieve the best level of rent possible, but at the same time should not want their property sitting on the rental market unlet for a considerable period. For every month that goes by unlet, it is in effect costing a landlord money in lost rent.

In some cases, landlords will have a mortgage on their investment property and the related monthly repayments will still be due, regardless of whether the property is occupied. Therefore, a landlord should ensure they set a sensible, competitive initial asking price.

When first releasing a rental property into the market, a landlord should want to make sure that it is going to ‘stand out from the crowd’ when being promoted, especially online.

There is often strong competition, so high-quality photographs and an informative description are essential. The description should focus not only on the property itself but also highlight key amenities in the surrounding areas.

This can include local rail stations, schools, restaurants, gyms, and other leisure facilities.

Ensuring it secures broad exposure across all platforms is also very important. An established letting agent should be best placed to assist with this, especially if they promote their properties on all key property portals and have a wide network of branches situated in and around the property’s location. The greater the level of exposure, the greater the chance there is of securing serious interest from professional working tenants at the best level of rent achievable.

A rental property may attract strong interest from prospective tenants. Choosing the most suitable is not an exact science, but a crucial part of the process is ensuring that those who are interested are properly referenced and that appropriate credit checks are conducted.

It is difficult for a landlord to do this themselves, as they are limited by the amount of sensitive data that is openly available. For example, current and previous employees of the tenants are unlikely to respond to any queries over their earnings or employment history. Furthermore, landlords will not have access to the relevant databases to check a tenant’s credit history. Therefore, making use of a professional referencing company is an essential part of the process.

However, some are more thorough than others. It is worth a landlord doing their homework in this regard or utilising the service of a professional letting agent who should have a relationship with an established and reputable referencing company. Of course, nobody can dictate how a tenant will actually behave once they move into a property, but any potential risks can be reduced significantly by placing tenants through a process of comprehensive referencing and credit checks. This should identify certain issues, especially relating to affordability and credit ratings. Where concerns arise, the landlord then has the opportunity to reconsider their position in advance of any tenants collecting their keys and moving into a property.

There are primarily two ways a landlord can manage their rental property. Either they can deal with everything themselves or instruct a letting agent to look after most things on their behalf.

With self-management, a landlord will deal with their tenant directly, issue all related paperwork, and coordinate any maintenance-based matters which may arise during an active tenancy.

They will also process rental payments and be responsible for ensuring full legal compliance. Dealing with everything directly can save some money, but equally it can prove very time-consuming, especially in terms of dealing with issues reported by tenants and keeping up to speed with any ongoing changes to relevant legislation.

Instructing a letting agent to handle most matters means a landlord pays a monthly management fee. However, a professional agent with the relevant knowledge and skills who offers a comprehensive management service can represent genuine value for money, saving landlords a lot of personal time, stress, and, in some cases, money.

Letting your property is a commercial venture and should be treated as such. Getting to grips with the numbers involved should ensure the investment proves profitable. A sensible financial budget from the very outset is crucial, and a top tip is to develop a simple checklist of all the things that should be considered an expense, be it from the very outset, throughout the tenancy or when it comes to an end.

Combining this with projected rental income that may be received provides a reasonable estimate of the likely returns.

Here are some of the most common expenses:

Keeping detailed, accurate financial records throughout will ensure a landlord remains fully compliant and avoids unnecessary stress and unexpected expenses. Once again, a professional letting agent can help advise on these matters.

Many potential pitfalls can be avoided by approaching such a venture sensibly from the outset. Here are some common mistakes landlords make.

For UK landlords, it is mandatory that any deposit paid by tenants upon commencement of a tenancy is adequately protected in an approved scheme. A landlord must register this ‘dilapidation’ deposit with one of only a small number of Government-approved schemes. This must be done within 30 days of receipt of the funds, and failure to comply can result in both legal and financial penalties.

For anyone thinking of renting out a property who would like to know more, our professional team of lettings experts are happy to guide them through the entire process.

With a comprehensive range of lettings and property management-based services, our team is well placed to offer sound, professional and concise advice designed to ensure landlords receive the best possible financial returns from their property investments.

With more than 50 years of local knowledge and experience, we currently let more than 1,000 properties each and every year and have established positive business relationships with most of our landlords. You can see what many landlords have to say by reading their reviews.