As a first-time landlord, it can be easy to feel overwhelmed with the decisions that must be made and the legalities that must be considered. For many people who have not rented a property before, it is common to face issues during or following the termination of the tenancy due to a lack of proper procedures in place.
Therefore, we have compiled our top five things to consider before renting a property, which, if considered, will help to ensure that all goes smoothly and that you and your investment are protected.
1. Set the right price.
To ensure that you attract the right type of tenants, you should research your local area and rent prices for similar properties. With that, the price you set should be realistic yet attainable.
So, ensure that the price you advertise for allows you to cover your expenses, both fixed costs and any potential domestic property repairs (which, in most cases, you, as the landlord, are liable to repair). However, do not set the price so high that it is not affordable for the property type and condition, as this could leave you without tenants for extended periods, which can get expensive.
If you are still researching the price you should set, you should speak to your estate agent. They will better understand the market, giving better insight into where your price should be set.
2. Follow a tenant screening process.
Introducing a tenant screening process may feel tedious, particularly if you have never had a bad experience. However, as the landlord, you must remember that it is in your best interest to protect yourself and your property. Therefore, screening tenants will give you peace of mind knowing that they will pay rent punctually and take care of your property as if it were their own.
You are more likely to have a better relationship with a tenant you can trust, so always consider their rental background, criminal history, and financial status (consider whether they can pay rent on time).
Similarly, you should require a rental application that you can keep as a record that has information about your prospective tenant:
- Current address
- Reason for moving
- Employer information
- Landlord references
You must also ask all appropriate questions to ensure you have the whole picture and have protected yourself as much as possible.
3. Require credit/background check.
As part of your tenant screening process, you should obtain a credit check, much like getting any information about a criminal record.
When looking at the records, there are a variety of ‘red flags’ you should consider:
- Notable debts
- Undue payments
- Bankruptcy filing
- Prior eviction history
It can be easy to be persuaded by an otherwise ideal candidate; however, you must always consider their credit, as bad credit may indicate financial imprudence.
4. Have a written rental agreement.
To protect yourself, your property and your finances, it is always wise to have a written rental agreement, even when renting to family or friends.
Without a comprehensive written rental agreement, proving what was agreed upon before your tenants moved in can be difficult.
The agreement should be specific and binding, and you should carefully consider what you want to include. Here are a few examples:
- Do you allow pets?
- Is there a late rent fee?
- What is the security deposit amount, and does your tenant receive it back in full?
- Is there a rule to regulate noise?
- Who pays for the repairs if something breaks?
- What are the terms of the deposit?
- What times are you, as the landlord, available if your tenant needs to contact you?
Ensuring that you cover all bases in your rental agreement leaves little room for dispute further down the line since everything is mapped out. This should also improve your relationship with the tenant since you both know where you stand.
5. Keep records of everything.
Much like the importance of having a written rental agreement, you should keep records of everything relating to your property, from the property’s condition to information about your tenant (as mentioned above).
Everything should be kept, as you never know when you might require it.
A great way to keep track of your property’s condition is to take pictures of everything just before your tenants move in. You should ensure that you can access the date and time the pictures were taken to avoid future disputes. Furthermore, do not only take pictures of each room but also of more minor details such as scuff marks, dents or peeling paint. This way, you can be sure of any damage the tenant caused.
Similarly, once you have obtained the credit check and tenant screening form, you should keep these. You never know when you may need to refer to them in the future.
Property Lawyer Near Me
At Jackson Longe, based in Richmond, Surrey, we can offer specialist landlord and tenant law guidance, including tenancy agreements.
Our service is carefully structured to allay any fears or stress and can support you through drafting your tenancy agreement and ensuring that it is appropriate for your circumstances, even as a first-time landlord.
Please get in touch today on 0208 332 2069 or email firstname.lastname@example.org.