Manchester Property News

The housing market is currently experiencing a significant surge. Whether you currently own a property or are contemplating the idea of purchasing one for rental purposes, becoming a landlord has never been a more astute investment decision.

By renting out a property, you can generate a steady income stream while enjoying the flexibility and rewards of a versatile lifestyle. Similar to running your own business, you have the autonomy to make crucial decisions regarding expenses, agreements, conditions, and ultimately determine the tenants occupying your property.

If you're contemplating becoming a landlord, it's crucial to fully comprehend the requirements before making any major decisions. To simplify this process, here at Peter Anthony, we’ve compiled a list of essential factors you should know about renting out a property.

How to become a landlord 

Verify your eligibility to lease

If your property has a mortgage, check with your lender about obtaining a buy-to-let mortgage. Additionally, determine whether the property is leasehold or freehold. If it's leasehold, you'll need permission from the freeholder to sublet.

Select a suitable buy-to-let property

If you don't already own a property that you intend to put on the market, begin your search. Consider factors such as the property's location, state of repair (as maintenance costs can be substantial), age, and accessibility.

Apply for a buy-to-let mortgage

To apply for this type of mortgage, you should already be a homeowner, possess a good credit rating, earn a salary exceeding £25,000 per annum, and be under 70 years old. Typically, a deposit of around 25% is required.

Get landlord insurance

Although landlord insurance is not a legal requirement, it is typically a prerequisite set by most buy-to-let mortgage lenders. This insurance provides crucial protection for your investment in the event of fire, flooding, or subsidence. Moreover, you have the option to include additional beneficial features that cover expenses related to broken pipes or boilers.

Decide how to manage your property

You can choose between managing the property yourself or investing in a lettings agent to handle the management tasks. Opting for a lettings agent can alleviate stress by managing inspections, tenants, and rent collection.

Our lettings agency services are designed by landlords for landlords. Fully ARLA Approved, you’ll have access to ‘MyPA’ which acts as your own Personal Assistant for your properties 24 hours 7 days a week for free. MyPA allows you to see upcoming events such as inspections or Gas Checks, download statements, see recent transactions, search our listings for new investment properties and much more.

Find suitable tenants

Once you've completed the necessary steps, obtained landlord insurance, and ensured compliance with safety regulations, you can market your rental property. Lettings agents can also assist in finding reliable, long-term tenants.

At Peter Anthony, we take immense pride in our rigorous applicant referencing process, which surpasses industry standards. While many letting agents solely rely on third-party credit agencies, our referencing procedure goes beyond that. We conduct thorough in-house referencing, followed by a comprehensive evaluation involving a Negotiator, Property Manager, and Lettings Manager. Only when all parties unanimously agree, do we proceed to approve a prospective applicant.

Right to rent

Landlords in England must verify that prospective tenants have the right to rent in the UK before signing any rental agreements. Tenants have the right to rent if they are British citizens, have Home Office permission to live in the UK (including work or student visas), possess settled status or indefinite leave to remain, or qualify under humanitarian or refugee status.

Costs vs potential returns

Expenses include mortgage repayments, letting agency fees, rental income tax, property renovation costs, ongoing maintenance expenses, landlord insurance costs, bill coverage (e.g., council tax), and stamp duty.  The amount of tax landlords pay depends on their total tax-deductible income, with different rates for basic, higher, and additional rates.

Stable rental income is the objective for any first-time landlord and can bring numerous benefits when you find reliable tenants. Keep in mind that rental income may fluctuate due to capital growth or tenant vacancies, so it's crucial to have sufficient rental income to cover potential months without tenants.

Rental yield

Rental yield calculates your annual rental income as a percentage of the total value of your buy-to-let property. It helps determine whether your property is a sound investment. To calculate rental yield, divide your annual rental income by the property value and multiply by 100. A rental yield of 7% is generally considered favourable by property investors.

Landlord responsibilities

1. Property maintenance, repairs, and associated costs.
2. Ensuring the security of the rental property.
3. Complying with gas, electric, and fire safety regulations.
4. Protecting your tenants' money by enrolling in a Client Money Protection scheme.
5. Verifying that your tenant has the right to rent in the UK.

Safety regulations for landlords

1. Install carbon monoxide alarms in rooms with solid fuel burning appliances.
2. Install smoke detectors on escape routes on each floor of the building.
3. Arrange annual gas appliance checks by a Gas Safe engineer.
4. Conduct electrical testing every 5 years.
5. Ensure furniture and electrical equipment meet fire safety standards.
6. Secure all windows, doors, and locks.
7. Obtain an Energy Performance Certificate through property inspection.
8. Provide tenants with copies of safety certificates.

At Peter Anothony, we can manage your property on your behalf. Our tenants can contact us via our website or UK based call centre 24 hours a day, 365 days a year. So, if there is an emergency, rest assured we're already dealing with it.

When should landlords return deposits? 

Landlords must return a tenant's deposit within 10 days of the request, but tenants cannot request the return before the termination of their tenancy.

How often should landlords update appliances? 

There is no legal requirement for tenants to replace appliances unless they are damaged or broken, but appliances should be refurbished every 10 years.

How often should landlords inspect a property? 

Landlords should conduct quarterly inspections to assess the property's condition, address maintenance or repairs, and ensure tenants are caring for the property. A minimum interval of 3 months between inspections is recommended, with a 24-hour notice period before each inspection.

Renting to tenants with pets

Under the new Model Tenancy Agreement introduced in January 2021, landlords can no longer impose a blanket ban on pets without just cause. Rejections must be assessed individually, and tenants will be responsible for any pet-related property damage. Renting to pet owners can be advantageous due to high demand, potential for higher rates, and the possibility of securing long-term tenants.

Can you rent out an inherited property?

Yes, you can rent out an inherited house. However, ensure you can cover any remaining mortgage payments and check with your mortgage lender for permission. It's advisable to have rental income at least 25% higher than your monthly mortgage payments.

Houses in Multiple Occupation (HMO)

What is HMO?

HMO refers to a building, property, or flat where at least 3 people from more than 1 household occupy the premises, and they share toilet, bathroom, or kitchen facilities.

What are my responsibilities if I let a HMO?

If you let an HMO, you'll have additional responsibilities, including sufficient bin space, periodic electrical replacements, avoiding overcrowding, annual gas safety checks, clean communal areas, and strict fire safety measures. A licence from the council is required for HMOs occupied by 5 or more unrelated people or with 2 or more separate households.

Minimum room size for sleeping in an HMO, bedroom sizes must adhere to the following guidelines:

1. 1 person aged 10 or over: 6.51 square metres
2. 2 people aged 10 or over: 10.22 square metres
3. A child under 10: 4.64 square metres
   
4. Please note: Some councils may set higher standards.

Preparing for tenants

Before tenants move in, ensure to:

1. Address any structural repairs.
2. Thoroughly clean the property.
3. Update appliances, including the boiler, kitchen appliances, and plumbing.
4. Leave instructions for all appliances.
5. Conduct professional fire, electrical, and gas safety checks to comply with regulations.
6. Provide working keys to tenants.
7. Transfer utility bills to the new tenants' names.
8. Record final metre readings for yourself and the tenants.
9. Provide tenants with copies of inventory, smoke alarm checkline, Energy Performance Certificate, electrical report (EICR), gas safe record, deposit terms and conditions, how to rent booklet, Schedule 2 Ground 2 Mortgage Notice, and an Assured Shorthold Tenancy Agreement.
10. Share your contact and bank details if you manage the property yourself.

How to decorate a property to let out

Decorating a property to rent out requires a thoughtful and neutral approach to appeal to a wide range of potential tenants.

Here are some tips to help you decorate a property to attract prospective renters:

Keep it neutral

Opt for a neutral colour palette for walls, floors, and large furniture pieces. Neutral tones create a blank canvas that allows tenants to envision their own style and furnishings in the space.

Choose durable and easy-to-maintain materials

Select durable materials for flooring, countertops, and fixtures that can withstand wear and tear from different tenants. Easy-to-clean surfaces will also make maintenance more convenient.

Prioritise storage

Integrate ample storage solutions such as closets, shelves, and cabinets. Tenants value properties with sufficient storage space to keep their belongings organised.

Pay attention to lighting

Ensure the property has adequate lighting. Utilise a combination of ambient, task, and accent lighting to create a warm and inviting atmosphere. Replace outdated light fixtures with modern, energy-efficient alternatives.

Focus on cleanliness and maintenance

Ensure the property is clean and well-maintained before showing it to potential tenants. Regularly inspect and address any maintenance issues to provide a hassle-free living experience.

Enhance curb appeal

Create an inviting first impression by maintaining the property's exterior. Keep the landscaping tidy, touch up paint if needed, and ensure the entrance is clean and welcoming.

Document the property's condition

Take photos and create an inventory of the property's condition before tenants move in. This will help ensure a smooth transition and provide a reference point for any potential damages.

If you require additional guidance regarding renting or letting your property, please feel free to reach out to us here at Peter Anthony. Whether you're a novice landlord, acquiring a new property, or aiming to attract potential tenants, we are delighted to offer our expertise from branches in Levenshulme, Manchester City Centre, Stockport, Liverpool & Salford.