Leasehold Properties - It is essential that you advise and obtain consent to let your property from your freeholder

Mortgage - It is essential that you advise and obtain consent to let your property from your mortgage lender. Usually it is not a problem but some companies may charge a higher interest rate

Insurance - It is essential that you advise and obtain consent to let your property from your insurance company. Failure to obtain written consent may render your insurance void in the event of a claim

It is the landlord's responsibility to insure the buildings and contents
It is the tenant's responsibility to insure tenant's own contents and possessions

Other specialist landlord's insurances include
Public or Property Owners Liability Insurance - covers against death, injury or damage to individuals on or near the property. For example tenants, meter readers, postmen etc
Employers Liability Insurance - covers death, injury or damage to anyone you employ. For example gardeners, handyman etc (sometimes covered in previous policy)
Loss of Rent - covers loss of rent if the property is uninhabitable due to a major catastrophe and while repairs are being carried out
Emergency Assistance Insurance - covers call out charges in case of emergency
Rent Guarantee Insurance - covers rent in case of tenant out of work or ill etc
Legal Expenses Insurance - cover legal fees during disputes

Find a Landlord's Insurance with the best deal
Find a Tenant's Insurance with the best deal

Gas Safety Certificate - All landlords now have to carry out annual gas safety inspections (with a CORGI registered engineer) by law and provide each tenant with a copy of the Gas Safety Certificate

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Electricity - Many landlords carry out three or five yearly electrical safety inspections (with a NICEIC registered engineer). Although it is not required by law at present, it is highly recommended.

Any second-hand appliances supplied such as vacuum cleaners, kettles etc should be checked and marked safe by a qualified electrician

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Furniture & Furnishings & Decor - All furniture and furnishings must comply with Fire Resistance requirements. and have labels to show that they comply

All furniture, furnishings and décor should be of good standard. A good standard of furniture and décor will attract a good quality of tenant. Large Landlords with a portfolio of properties use specialist discount furniture suppliers who supply sturdy, yet attractive furniture and where necessary install and assemble.

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Smoke Alarms & Carbon Monoxide detectors - A smoke alarm in working order to be provided on every floor. A Carbon Monoxide detector to be provided

Screening Tenants - Proper tenant screening will eliminate 90% of your letting problems. It is important to carry out Credit Checks, Identity Checks and take out References. Unfortunately a bad tenant can cost the landlord thousands of pounds in legal fees, lost rent and malicious or careless property damage

References are usually from employer, bank, previous two landlords and a character reference. Credit Checks usually involve search of electoral register to confirm address for last three years, county court judgements and credit history. Identity Check can be carried out by checking the following documents - National Insurance number, Passport (keep copy), Driver's Licence (keep copy) and Bank Statements for 6 months.

Use a credit reference agency, some of whom carry out all checks - Credit Checks, Identity Checks and References. The charge for this service can be passed to the tenant

If the tenant is unable to meet the required income or other criteria, the tenant can suggest a guarantor. For the self-employed, references are obtained from an accountant or solicitor.

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Deposit & Rent - The tenant pays one month's advance rent and one month's rent as deposit before the commencement of the tenancy. Rent is usually paid by standing order. Rent is usually increased once a year, depending upon supply and demand of an area

The deposit is held to cover any breakages, damage or other tenant liabilities (e.g outstanding bill). At the end of the tenancy it is important to check the property in the presence of the tenant and return the deposit if the property is left in a clean and satisfactory condition. Or assess the damage and agree deductions if any

Inventory & General Condition It is important that an inventory of furniture, fixtures, and fittings is prepared together with a schedule of condition as well as digital photographs of each room. The condition of carpets, curtains, furniture, paintwork, boiler, appliances etc is noted. If you have decorated the house (write down 'walls freshly painted'). The inventory is agreed and counter signed by the tenant. Please note a great deal of misunderstanding and disputes occur when this is not done.

The inventory and general condition to be checked on periodic inspection of the property - usually three monthly

Cleaning - The property should be thoroughly cleaned before a new tenant moves in and also in between lets

Repairs - The landlord is responsible for any repairs to the property unless it is caused by the misuse or negligence of the tenant

Emergency Repairs - In the event of an emergency such as burst pipe or gas leak It is important to carry out the work immediately

Major Repairs & General Maintenance - It is important that the property is kept in good state of repair and décor. During your inspections make a note of things which require attention, obtain estimates for them and carry them out over a period of time. Treating dampness, blocked drains, missing roof tiles, dealing with small jobs such as bleeding radiators, airlocks, sealing gaps around sinks, ensuring cupboard doors and drawers are not too loose, windows opening smoothly etc

Simple Preventative Maintenance jobs, if attended to immediately can save you thousands. For example
if drains and gutters not cleared, it causes flooding,
if central heating not descaled, boiler needs replacing,
if roof tiles not replaced, flooding occurs
if window frame and sills not treated and filled, windows need replaceing
if pipes not insulated, burst pipes in winter
If your tenant complains about a leak, treat it seriously and attend to it immediately

This ensures that your property is cared for and remains in good condition

Periodic Renewals & Replacements - Landlords have to allow and plan for regular renewals as well as replacements
Electrical items such as cookers, fridges, boilers etc,
furniture items such as settees, beds etc and
furnishings such as carpets and curtains
require renewal over a period of time.
Some universities and corporate companies insist on total redecoration every three years and beds, settees to be replaced every five years. Carpets, curtains, and appliances need to be replaced as and when required (depending on quality)

Periodic Inspection - It is important to carry out regular three monthly inspection of the property to check the condition of the property. When the tenants know that the property is regularly inspected they are more likely to care for and maintain the property

Landlord has a right to carry out periodic inspections of the property by prior arrangement with the tenant

Garden - Tenants are responsible for the upkeep of the garden. However it is the responsibility of the landlord to provide gardening tools, mower etc. Tenants are not too keen on looking after gardens and it is best to keep it low maintenance. In some cases landlords arrange for their own gardener to look after the garden and charge the cost to the tenant (with prior agreement of the tenant)

Gas, Electricity, Water, Telephone, TV Licence & Council Tax
The gas, electricity, water, telephone, TV licence and council tax bills are generally the responsibility of the tenant. Advise the relevant utility board in writing (counter signed by the tenant) a) the meter readings of gas, electricity and water b) transfer to the name of the tenant c) the date when tenant moved in.

Advise the local authority in writing (counter signed by the tenant) the name of the tenant for council tax purposes. During vacant periods and when the house is unoccupied some councils will agree a 50% reduction on the council tax bill

At the termination of the tenancy the meter readings to be agreed and the relevant utility board advised in writing (counter signed by the tenant). The final account to be forwarded to the tenant's new address.

Tenancy Agreement - The most common form of tenancy agreement used is an "Assured Shorthold Tenancy" (an AST) under the 1988 Housing Act (amended 1996). This type of tenancy offers the most flexibility to both landlord and tenant; has straightforward notice procedures for bringing the tenancy to an end and a special Accelerated Possession court procedure should tenants fail to vacate.

It is for a period not less than 6 months and then either renewed for another six month block or renewable on a month to month basis. At the end of the fixed term, the landlord can can regain possession or terminate by giving two month's notice (on a prescribed form). The tenant can terminate by giving one month's notice.

Taxation - We recommend that you employ the services of a qualified accountant.

However in general the following are deductible allowance expenses
Maintance, repair and redecoration (but not improvements)
Insurance premiums
Agents managing fees
Accountancy fees
Legal fees
Renewal of furniture and equipment
Interest on mortgage
10% of rent for depreciation, if furnished

For non resident landlords, the managing agents have a requirement to deduct 23% basic rate tax, unless they have an approval from the Inland Revenue to pay rents gross

Capital Gains Tax - In general, property which is used for letting will become liable to Capital Gains Tax when sold

There is a Capital Gains Tax-Free Allowance of £8,200 for singles and £16,400 for married couples

Check In
It is important to accompany the tenant to the property
a) Agree the inventory and general condition of the property in writing (counter signed by tenant)
b) Agree gas, electricity and water readings, advise the relevant boards in writing (counter signed by tenant)
c) Explain how boiler system, washing machine, alarm system and other appliances work. Advise emergency phone numbers for boiler problems etc
d) Advise which day refuse is collected
e) Advise gas leak emergency phone number

Check Out
It is important to carry out following with the tenant
a) Check items as per inventory (allow for fair wear and tear)
b) Check décor condition (allow for fair wear and tear)
c) Check condition of property - boiler, dampness etc,
d) Agree gas, electricity and water readings, advise the relevant boards in writing (counter signed by tenant)

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How much can I borrow

Lenders will usually lend 85% of the purchase price of the property. Some will go up to more. More competitive rates are available if you only borrow 75%. The rent or the expected rent to be 125-130% of the monthly mortgage payment. Interest only as well as full range of fixed, capped, discounted, tracker, variable and other mortgage deals are available. Lenders will also take into account your income

For normal residential property lenders will usually lend up to three times the size of your annual income. Some will go up to more. For joint applicants, it is usually three times the first income and one time the second income or two and half times the combined salary. The lender will contact your employer to confirm your income. If you are self employed the lender would require proof of income

There are many lenders who consider proposals which do not fit 'normal' lending criteria. 100% mortgages as well as 5 times or even more times income are available. Special packages for professionals such as doctors, accountants etc

See Mortgages & Finance for more details

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Why not let us help you find recommended professionals who provide the best services and products in the property industry. No obligation quote. Check out the offers from each category and see how much you can save

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