What do you do when you find that you have an extra house? It can happen! Sometimes couples move into one house and find they have a spare.
So, do you sell the spare or do you rent it out and hope to make a little money out of the deal?
The choice for many is a no-brainer!
Having that extra income can make life a little easier, especially if you suddenly find that one of you is out of work, or you start a family. Many people invest in property as a cushion for their retirement, so they have enough money coming in to cover any their living costs, rather than rely on ploughing cash into a pension fund.
As with all investments, there are some pitfalls to be aware of, but with a little planning you should find the process pretty straight-forward:
- First and foremost, speak to your mortgage lender. They will probably want some form of Landlord insurance in place to ensure that their interests in the property are protected.
- Secondly, speak to a solicitor. Many of these will be able to draft you a tenancy agreement to give to any prospective tenant. Some agreements include a repainting clause, so that when a tenant leaves they have to repaint the property and have the carpets cleaned. Better make sure that you stipulate what colours are permitted in the property. A solicitor will also be able to advise you on the many regulations governing the letting of residential property. Every new landlord has a responsibility to ensure that they are up to date on the latest regulations governing houses to let.
- Talk to a local agent. A licensed agent may be able to take all the stress out of renting the property for you, especially if they offer a redress scheme and offer client money protection. If something does go wrong with any subsequent tenancy, then the agent has a duty to make sure things are put right.
- If you are leasing a property, try to make sure the property is well presented and compares well to neighbouring properties. If you are offering a part-furnished rental, then try to ensure these are relatively modern to maximise the rentability of your property. Make sure that safety checks have been carried out on gas and electrical appliances that are included in the rental.
- Check your tenant’s references. It makes sense to know exactly who you are leasing a property to. You will need to assess any risk to yourself and be satisfied that your tenant can pay the rent!
- Get insurance in place to cover your losses, including the possibility of your tenant defaulting on the rent.
- Carry out an inventory of the property, including condition of walls, ceilings and doors together with other fixtures and fittings. A video camera can be useful for these situations as you can compare on a like for like basis.
Remember that if something does go wrong with the property, you may have the responsibility to put it right – check the tenancy agreement carefully!