Advice for accidental landlords
Accidental landlords become landlords as a result of circumstance, rather than design. There are many reasons that someone might become an accidental landlord.
They may have inherited a property, or had to relocate for work reasons. Whatever the circumstances, the owner would have decided that their best option is to let the property rather than to sell it.
Statistics confirm that 30% of UK landlords are accidental landlords. Naturally, accidental landlords tend to be inexperienced when it comes to letting and unsure about their obligations.
Inform your insurer
You must notify your insurance company that the property is now being used as a rental property, your insurance policy will most likely be invalidated. That could be a very expensive mistake.
In addition, we advise that you look at taking out public liability insurance to protect you against any incident which takes place in or around your property.
Talk to your mortgage provider
As well as your insurer, you should also talk to your mortgage provider to let them know that you intend to rent your property. In some cases they would allow you to stick with the current mortgage deal for a year or two with a view of switching in the future if becomes necessary.
Know your legal obligations
By law, there are several legal obligations which all landlords must adhere to. These include things like ensuring any deposits are placed in a government backed tenancy deposit scheme, and ensuring that the property you’re letting is safe.
Organise a professional tenancy agreement
It is essential that you write a clear and legally binding tenancy agreement. This is the contract between you, as the landlord, and your tenants which lays out the terms and conditions of the tenancy duration, rent, late fees, obligations, responsibilities, repairs, inspections etc.
Make sure to arrange the inventory
Before letting your property, it is a good idea to take a full inventory or ask an inventory clerk to prepare it for you. Inventory must be signed by the tenants, that`s when your tenants become legally liable for damages and missing items.
It is best to take photos or videos of the property itself and any items you are including as part of the tenancy in detail.
Switch responsibility for utilities payments
Ensure that all the utilities gas, water, electricity, broadband etc. are transferred onto the name of your tenants and make sure you state their responsibility for payment of utilities in your tenancy agreement.
Know your rights and your tenants` rights
Be aware of your tax liabilities
– Tax returns
– Capital gains tax
When you sell a property which you have previously rented out for a profit – you will be liable for capital gains tax. You pay capital gains tax on any gains you have made over the initial purchase price of the property.
You should also be aware that there are several tax deductions which you are entitled to claim as a landlord. These are expenses which you can deduct from your taxable rental income. For example: letting fees, property management fees, repairs and maintenance etc.
If you have any questions regarding property management please contact Pelin Martin on