Accidental landlord? Here’s what you need to know

Are you thinking of letting your own house or flat, instead of selling it? Or perhaps you’ve inherited a property and would like to let it out. If so, you’re about to become what’s called an “accidental landlord”.

You’re not alone. According to the 2021 English Private Landlord Survey, 42% of landlords first became landlords “accidentally”. 35% originally bought their property to live in themselves, and 8% had either inherited or received it as a gift. I’m in that 42% as I first became a landlord when I decided to let a flat I already owned.

It’s a steep learning curve when you’re a newbie landlord, accidental or otherwise. This blog post gives you practical 10 tips on how to go about becoming a successful accidental landlord.

Last updated: 14 Mach 2023

Tip 1: Sort out your mortgage

The first thing accidental landlords need to do before going any further is to talk through their options with a mortgage broker. Why is this? Most residential mortgages don’t allow lettings, so you will need to check the situation with your mortgage. Although some lenders do provide consent to let, this is normally for a limited time.

Accidental landlords consequently are likely to need to switch to a buy to let mortgage. Your lender will apply a stress test to see if you will receive enough rent to cover the mortgage. With the increase in interest rates in 2022 and 2023, these stress tests have become tougher.

The standard affordability test is whether the rent is 125% of the interest payments at a set rate. Lenders often use a “stress test” rate that’s higher than the actual amount you’ll be paying during your fixed rate period. This is to ensure there is enough margin to take account of future increases.

It’s also likely that you’ll need at least 25% equity in the property to qualify for a buy to let mortgage. Equity is the amount you “own” of the property, after deducting the mortgage from the value of the property.

Tip 2: Take out specialist landlord insurance

Standard residential buildings (and contents) insurance won’t be suitable for letting. You should therefore arrange for landlord insurance with a specialist provider.

If you are not furnishing the property, you’re unlikely to need contents insurance.

I personally use Total Landlord Insurance by Hamilton Fraser, who the NRLA recommend. NRLA members receive a 10% discount. If you’re not already a member, you can get £15 off membership by using this NRLA referral code UYN-702.

Some landlords take out insurance to cover rental payments if their tenants default on the rent. It’s also possible to get insurance for legal expenses to cover evictions. Take a look at the NRLA recommendation.

Tip 3: If it’s a flat, get consent to let

If your property is a flat, or a leasehold house, it’s likely you’ll need to get consent from the freeholder to let the property. This is technically sub-letting under the lease with the freeholder.

Consequently, it’s really important to check your lease to see what your obligations are. I had to obtain freeholder consent to let from RMG, the property manager of the development my flat was on using the above form. It cost £60 in 2019 and was purely an administrative exercise. This is one of the downsides of owning leasehold property on a development.

Tip 4: Carry out landlord safety checks

Landlords need to carry out a number of safety checks before letting a property. Here’s a handy checklist, so you know what you’ll need to do before your renters move in.

It is important that you give the tenants copies of the EPC, EICR and Gas Safety Certificate (as well as the How to Rent checklist) before they move in. Also, if you don’t provide the EPC, Gas Safety Certificate and How to Rent checklist, you won’t be able to use Section 21 to terminate the tenancy agreement. Take a look at my blog post for more details on how to terminate a tenancy agreement using Section 21.

Although it’s not technically required as part of the Gas Safety Certificate testing, I strongly recommend having the boiler serviced each year. It extends the life of the boiler, and shows you take your renters’ safety seriously.

OpenRent offer really good rates for Gas Safety Certificates with £45 as standard, and £15 for additional appliances (prices as of 22 March 2023). You can also add a boiler service for £55 (highly recommended). Click here for more details on their Gas Safety services. OpenRent also offer competitive rates for EICRs and PAT testing. Click here for details on their electrical safety services.

Rental properties must have an Energy Performance Certificate (EPC) rating of E or better. There’s pending legislation that will require rental properties to have an EPC of C or better (or £10k of energy efficiency improvements) by the end of 2025. It’s still not clear if this Bill will come into force in 2025, but that’s the direction of travel.

My blog post on what landlords need to know about EPCs will help you f your property currently has an EPC rating of D or E.

Tip 5: Decide what you’re going to provide

One of the decisions you’ll need to make is whether or not to let your property furnished, or unfurnished. A lot depends on your local area and target market. Young renters in city centres tend to prefer properties to be furnished, and longer-term renters often have their own furniture.

When I let my flat as an accidental landlord, I offered the renters the choice of it being furnished and unfurnished, for the same rent. As I’d been living there, it was already furnished. However, not one of the people who viewed the property wanted it to be furnished. Not even the good quality beds. So I paid for it to be put into storage.

The downside of furnishing a property is that the on-going costs are higher, as you’ll need to replace furnishings that wear out. There is more to go wrong, which means the property will take more to manage.

If you decide to let unfurnished, there are still some items which you must provide by law – see the table below:

Many landlords don’t realise that properties should have a cooker and hob. The Homes (Fitness for Human Habitation) Act 2018 introduced the requirement for “facilities for preparation and cooking of food”.

Unfortunately, the guidance for landlords doesn’t explain what this means. However, renters should be able to prepare proper meals. Common sense means this is a cooker and hob, and not just a microwave.

Accidental landlords are likely to have a cooker and hob already, so providing adequate cooking facilities shouldn’t be an issue.

Beyond the items in the table above, everything else is optional for unfurnished properties. However, many landlords do provide some basic appliances such as fridge freezers, and useful items like curtain rails or blinds.

If you’d like to read more on what landlords usually provide renters, take a look at my blog post on unfurnished properties.

Tip 6: Decide how to let your property

As a first-time landlord, the prospect of finding renters for your property can be daunting. However, with renter demand being at an all-time high, and on-line letting services like OpenRent, it has never been easier to do it yourself.

I used letting agents four times before I became confident enough, and then wondered why I had waited so long!

Firstly, it saved me a lot of money. The last ‘find only’ letting fee I paid was an up-front cost of £2,100 for a rent of £1,300 pcm. This meant that I’d be approaching the third month’s rent payment before earning anything. OpenRent, by contrast, cost £49. The difference is staggering. You can find out more about OpenRent’s £49 RentNow Service here.

Also, I much preferred choosing who would be living in my property myself. I was able to see their reaction to questions, and get a feel for whether they’d be suitable. As I self-manage, it makes sense to start building the relationship with the renters myself from Day One, rather than relying on someone else to do it.

Finally, I actually found it easier, as there was no chasing the agent for feedback. Everything was under my control.

If you’re interested in letting your property, take a look at my guide on how to let your property yourself.

Tip 7: Decide how to manage your property

The next big question is whether or not you’ll manage the property yourself. Letting agents give the impression that it’s difficult, citing 170+ pieces of landlord legislation. But that’s not the case.

If anything, it’s easy for accidental landlords to manage their own properties when they let them. After all, it’s what you’ve been doing while you’ve been living there. To make sure they don’t miss anything, or forget to tell you, it’s sensible to do six monthly inspections to spot maintenance issues. That way you can see yourself, and you already know the property’s quirks!

If you manage your property yourself, you’ll save the 10-15% of the gross rent that managing agents normally charge. Given how tight margins are, that’s a huge amount.

Take a look at the table below for tips on how to manage your property yourself. If you’d like more practical, please take a look at my guide on self-managing.

Tip 8: Prepare the property for letting

Prevention is better than cure. It’s important to fix all the little things that are wrong with the property, before your renters move in. This will save you and your renters a lot of hassle. Things like dripping taps, dodgy flushing mechanisms in the loo, and that door that doesn’t shut properly. You’ll know what they are if you’ve been living in the property. They’re so much easier to fix when the property is empty.

Do give the property a coat of paint, and clean the carpets. If your property is in good condition when they move in, they’re more likely to look after it. Also, the fewer problems in the inventory, the easier it’ll be to show changes to the property’s condition in a dispute.

I leave a little gift and a Property Manual, with useful information for the property.

Tip 9: Join the NRLA and become accredited

As a new landlord, you’re bound to have questions and will want to check things from a reliable source. It’s also really important for you to get educated, and understand your legal obligations as a landlord.

This doesn’t mean going on an expensive property course. Instead, I highly recommend joining the NRLA, the National Residential Landlord Association.

The NRLA offers good value training and the module Landlord Fundamentals only costs £64 for members. As the name suggests, it teaches you the basics and you’ll get NRLA Accreditation. This will help your confidence, and prove to yourself and others you know all about your landlord responsibilities.

It also has a free help-line for landlords and lots of useful documents. Members also receive discounts from B&Q Tradepoint and Carpetright, to name but a few.

If you do wish to join the NRLA, take advantage of my NRLA referral code to get £15 off the cost of membership, by putting this code in the box: UYN-702.

If you’re interested in understanding how to be a good landlord, take a look at 5 hallmarks of a good landlord.

Tip 10: Download my free ebook for new landlords 😊

Finally, if you sign up for my free weekly newsletter, you’ll automatically receive a copy of my ebook, Manual for New Landlords. I published it in September 2022, and it’s full of lots of useful tips for newbie landlords, all in one pdf.

After you sign up, your welcome email will include the link to the free ebook. You’ll then receive one newsletter a week, every Friday morning. It has the latest property investing news and practical tips to help you on your journey as a landlord.

You can download your free copy of the Manual for New Landlords ebook by clicking here to the dedicated page for the ebook.

Good luck!

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