How to get the tenancy started on the right foot
Learn how to kick off your tenancy on a positive note with essential tips and guidelines for starting things right
Owning and operating a rental property comes with a lot of paperwork, all of which needs to be carefully filed.
Many years ago, when there wasn’t anywhere near as much legislation as there is now, a lot of landlords saw letting as more-or-less an ‘armchair investment’.
But today, with over 400 separate rules and regulations, and potentially huge penalties for breaking the law, you have to be able to manage your rental professionally if you want to make and hold on to good returns.
However, if you have enough time to dedicate to being a hands-on landlord and want to self-manage, read on. Our ultimate guide covers all the key elements of successfully managing both the tenancy and your property, to help make sure your rental investment journey is as rewarding as possible – both personally and financially.
This information mainly covers landlords letting in England. To manage a property in Scotland or Wales you need to be registered and in Wales you need to take a course and be qualified. Visit Rent Smart Wales or the Scottish Landlord Register Rent for more information.
And it’s not easy. A recent survey of 2,000 landlords carried out by Uswitch.com, found that almost two-thirds of those who currently self-manage are considering switching to a lettings agency. The top three reasons given were: dealing with repairs, dealing with legal requirements, and the process of finding tenants.
This includes:
‘Bricks and mortar’ documents:your purchase documents, any planning permission for conversions or extensions, etc., which you’ll need when you come to sell or transfer ownership
Warranties, guarantees and receipts: everything related to works carried out, fittings and furnishings purchased, and repairs made
Health and safety documentation: e.g. your gas and electrical safety certificates, any written risk assessment and fire alarm testing records. If anything goes wrong, you need to be able to show you took all reasonable steps to ensure your tenant’s wellbeing
Tenancy paperwork:e.g. referencing and right to rent checks, the inventory, deposit protection information - as well as any correspondence with your tenant during the tenancy. Bear in mind that any personal information you hold on the tenant must comply with data protection regulations
Insurance information: including specialist landlord insurance with malicious damage cover, additional insurance such as rent guarantee, emergency cover
Financial records:everything related to rental income, property expenditure - including receipts, budgets and KPI calculations, and any buy-to-let mortgage documentation
It’s important to file everything securely - ideally in both hard copy and digital formats - so it’s easy to find if you or someone else needs to see a document.
And if you want or need to hand over management of the property to someone else at some point, you become ill for example, it’ll help smooth the transition.
You should also be aware that:
The local council may ask for copies of health and safety documentation at any point
HMRC can ask you to provide documentation for up to the last seven years if they carry out a tax investigation
Your tenants can bring proceedings against you for up to six years after their tenancy ends
As such, it’s advisable to hold on to all relevant documentation for at least those time periods.
While the majority of landlords take a security deposit, not all do – see our separate article on the pros and cons. But if you do, you must protect it in one of the government-approved schemes and provide your tenant with the related ‘prescribed information’. This must all be done within 30 days of receiving the deposit.
If you don’t do what’s required, your tenant may be able to make a claim for up to three times the deposit amount and you will be unable to serve a valid section 21 until you’re compliant.
Full information on taking and protecting deposits, including what to do if you want to make a claim at the end of the tenancy, can be found in our ‘Ultimate guide to tenancy deposit protection legislation’.
Good communication between you and your tenant is key to helping the tenancy go smoothly, so make an effort to establish a good relationship from the start.
When you check them into the property, take them through the inventory, show them how everything works and let them know they can contact you with any problem during the tenancy, no matter how small. Remind them about the importance of ventilation and heating for keeping damp and mould at bay and make sure they have a list of emergency contact numbers and know what to do if something goes wrong.
Let them know how often you’ll be carrying out periodic inspections and what notice you’ll give them, and that if any repair or maintenance work is needed, you’ll keep them updated of the progress.
And if they’ve never rented before, it’s worth taking the time to explain how they should look after the property – such as cleaning regularly – to make sure it’s returned at the end of the tenancy in the same condition identified in the inventory, which will help protect their deposit. Our end of tenancy cleaning guide includes a checklist for you to share with tenants.
Finally, make sure you leave them with a ‘welcome pack’, containing copies of documents relating to the tenancy, instruction manuals for equipment in the property, and useful information and advice. See more on what to include in our separate article.
Make sure you (and your tenant) have appropriate insurance cover
Rental properties are viewed as being at higher risk from damage than owner-occupied homes, so it’s important to make sure you have landlord insurance that gives you an appropriate level of cover for your tenancy in case things go wrong. That could be accidental damage, malicious damage, contents, damage to the fabric of the property from things like storms or having a claim brought against you by someone who has been injured in your property.
Bear in mind that if you’re an HMO or student landlord, you will need a specialised product, as the different risks that come with having multiple tenants from different households may not be covered by a standard landlord insurance policy.
It’s also good practice to remind your tenants their belongings are not covered under your policy (many tenants don’t realise this), so they’ll need to take out their own contents insurance.
Having landlord insurance is one thing, but you’ve got to do all you can to make sure that if you need to make a claim, it will be settled as you expect. Nobody wants to have a claim refused! So, when you’re arranging cover, make sure you understand your obligations, such as maintaining the property in a good state of repair, and any excesses and exclusions on the policy. Importantly, find out what changes you need to inform your insurance provider about – which will include any change in the type of tenant or tenancy, if building works are being carried out and if the property is unoccupied for more than 30 days – so they can adjust your policy to make sure you remain covered.
Our guide to finding the best landlord insurance for you contains lots of useful advice to help you make sure your specific needs are covered.
