According to ARLA research, 'renting to retire' is also a key
motivating factor in the buy-to-let market. For example, more
than two fifths (42%) of today's landlords originally invested with
a view to creating a retirement 'nest-egg'. *
ARLA's tips for anyone "down-letting" a property to rent
for the first time are:
- Notify your mortgage and insurance
providers:letting out a property requires a different form
of mortgage from owner-occupation so consulting your mortgage
lender on their terms. The same applies to insurance, as your
buildings and contents may not be covered unless you discuss this
change with your provider first. Taking out insurance to protect
against a tenant defaulting on rent is also a sound investment in a
tough economic climate.
- Sign up to Deposit Protection:this has been
mandatory for all landlords since April 2007. Deposit protection
legislation requires deposits on all Assured Shorthold Tenancies to
be protected under a scheme licensed by the Government. For
more information, visit the Communities and Local Government
website, www.communities.gov.uk.
- To furnish or not to furnish: It is
possible to charge more for a furnished property. However, a home
furnished with second-hand or 'leftover' furniture may deter
prospective tenants and may even contravene Furniture and
Furnishing Regulations. There are also regulations governing
the installation of electrical equipment in rental properties -
ensure that these are being followed and that any equipment in the
property is regularly tested, as you will need to prove your
property is safe. The same is also true for gas appliances,
which must be certified and checked annually.
- Hands-on: Enlisting a managing agent to
oversee the property can be of great assistance, especially if you
are moving away from the area. At the very least, working with a
lettings agent to advertise and fill your home should make the
process smoother. Select the agent carefully, always use a
regulated agents (such as ARLA members) to ensure client money
protection, thereby securing both your money - and that of your
tenants' - and access to a redress scheme should it be
required.
- Let go: Finally, in all the decisions you
make about letting out your home, remember that it is no longer
your home - no matter how much you love it, it is now a home for
someone else and, hopefully, an income stream for you. The
chances are that accidental damage or wear-and-tearwillhappen, and
tenantswillcomplain - so try and keep a clear, detached head when
dealing with those kinds of issues, and don't take it
personally.
All ARLA Licensed members have a range of consumer protection
measures in place, for more details see: http://www.arla.co.uk/about-us/why-use-our-members/
*According to the ARLA Survey of Residential Investment Landlords, September
2011