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7 tips to thrive as a first time landlord

first buy to let house as a landlord

It can feel pretty daunting when you first start out as a landlord on your first rental property. It certainly was for me! In this blog post, I share tips I’ve picked up to help you thrive as a first time landlord.

Although over half of first time landlords bought their first rental property with the intention of letting it out, 43% became landlords “accidentally”. Known as accidental landlords, they didn’t set out to become a landlord.

I fell into this category with my first rental property, which was a flat I already owned. Many accidental landlords are like me, and may have originally bought their first rental property to live in themselves. Alternatively, they may have inherited or been given the property.

In any event, whatever the route to becoming a landlord, there’s a steep learning curve for us all when we first become landlords.

Here are 7 tips to help you get started on a sound footing, so you can thrive as a first time landlord.

Updated: 8 July 2024

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>> Show notes: Good Landlording podcast: Is buy to let still worth it for landlords?

Tip 1: Treat your rental property like a business

Business woman analysing spreadsheets on a Mac
It’s important to track financial performance

In deciding either to buy a rental property, or to not sell it if you’re an accidental landlord, you’re making an investment decision. It’s also a business decision. And like all businesses, it’s important to know what your objectives are. That way you can measure how your investment is performing

What does success look like?

In terms of objectives, are you investing for income in a good rental market, capital growth, or a mixture of both? Think about what success would look like for each property. For instance, gross income (what you take), net monthly revenue (what you make) and yield (annual rent divided by property value). For capital growth, what is your timescale?

Be aware that average rents, yields and capital growth vary considerably over the the country. For instance capital growth and rents tend to be highest in London and the South East, but yields are low. The latest Rightmove rental tracker (Q1 2024) says the average rent in London is £2,633 pcm, but the yield is 5.5%. By contrast, in the North East, whilst the average yield is a whopping 8.1%, average rents are only £882 pcm. Click here for yields and average rents in other regions and countries across the UK.

Equally, like all businesses, it’s important to keep your eye on the bottom line. How much you make after you have paid everything? And then you can decide whether it is worth keeping your investment, or whether you need to make other changes.

Ultimately if a property isn’t making you any money after you have paid the expenses, and this is unlikely to change, it doesn’t make sense to hold onto it.

I decided to sell my flat after 3 years of trying to make a go of it on Airbnb and then as a single let as an accidental landlord. eventually concluded that the net income would always be depressed by the high service charge (£2,500 pa compared to rent of £1,500 pcm). This was on top of what was already a low yield (4.5%). I’d not bought it to let, and I eventually concluded it would be better to sell it. Having caught the landlord bug, I used the money to buy a house with a considerably better yield in a stronger rental market elsewhere.

Keep proper business records

copies of receipts
Do keep receipts of business expenses for your tax return

You will need to report your rental income and allowable expenses as a sole trader to calculate how much income tax you will need to pay for your tax return. You also need to keep records of capital expenses so you can calculate your capital gain or loss for capital gains tax (CGT) purposes if you sell the property in the future (see this explanation of CGT). It’s important to keep your invoices and receipts. If you own your rental properties through a limited company, you will also also need to keep records.

Do also keep records of business mileage, as you can claim an allowance at a rate of 45 pence per mile for the first 10,000 miles. It soon adds up.

>> Related Post: Are limited companies best for landlords?

Part of treating your rental property like a business is acting professionally. Here are half a dozen rules to help you set off on the right foot and treat your rental property like a business, and run it as a good landlord:

  1. Be reliable. Do what you say you are going to do when you said you were going to do it.
  2. Do the paperwork. Don’t let the renters move in without signing the tenancy agreement. Also, if affordability is an issue, put a guarantee in place.
  3. Pay bills promptly. It is a professional courtesy and is likely to help you build positive relationships with the trades.
  4. Treat your renters with courtesy and respect their privacy, whilst still fulfilling your landlord responsibilities. Equally, don’t be over familiar as they are customers and not friends.
  5. Be clear about the frequency of inspections. I let my renters know at the start of the tenancy how often the property inspections will be, and keep to it. I also list in the house manual when the safety inspections are next due. It’s polite and practical to give tenants lots of notice before inspections or arranging checks and repairs. Technically you must give more than 24 hours written notice, but I usually contact them a week beforehand with a choice of time slots.
  6. Behave in professional and fair manner at all times. This includes the tone of messages and emails, as well as your speed of replying. If there are any issues, it is usually best to try to resolve them amicably. If renters fall into arrears, process is your friend. Send professional reminders by email before starting a formal debt recovery process. The NRLA has excellent templates for managing rental arrears. You can get a £15 discount is you use my referral code to join: UYN-702.

>> Related Post: How to deal with rent arrears

>> Related Post: How to carry out successful mid tenancy inspections

Be a good landlord

Being a good landlord is good business sense. It’s a virtuous circle: you look after your property well, which maintains its value. You treat your tenants fairly, and they’re happy. Happy tenants stay longer, which means things are more likely to run smoothly.

>> Related Post: How to be a good landlord

Tip 2: Make sure your mortgage allows you to let out the property

This is really important for accidental landlords who already have a residential mortgage in place before deciding to let the property. It is likely that your existing residential mortgage won’t authorise you to let the property, and you’ll need a buy to let mortgage. Therefore it’s important to contact your mortgage lender to make them aware of your new situation. Failure to advise them could result in mortgage fraud and may incur a fine.

As a short term solution, your lender may grant you a Consent to Let. This allows you to let your property for a maximum of 12 months while maintaining your current mortgage. This might be a good solution if you are wanting to try out being a landlord. However, the lender does not have to grant you the Consent to Let.

A longer term solution may be to switch your residential mortgage to a buy to let mortgage. Be aware that the mortgage company will use different test to see if you’re eligible for a buy to let mortgage. Often they use a stress test to make sure your rent covers 125% of your interest payments. Sometimes they use a higher interest rate to allow for future increases.

>> Related Post: Practical advice for accidental landlords

>> Related Post: What does Interest Coverage Ratio (ICR) mean?

Tip 3: Educate yourself about your landlord responsibilities

page in old fashioned typewriter with word legislation typed on it
Landlords are subject to almost 200 pieces of legislation

Landlords are subjected to a myriad of legal responsibilities, even more so if the rental property is an HMO.

It’s important to educate yourself about your responsibilities as a landlord, and to stay updated. An easy way of doing this is to join the NRLA, the National Residential Landlords Association. They have numerous resources available to members and run excellent good value courses. I particularly recommend the NRLA’s Landlord Fundamentals, which leads to landlord accreditation for members, and covers all of the key areas. If you are thinking of joining the NRLA, use my referral code SSAFF for a £15 discount.

Here are examples of what landlords need to do:

  • an annual gas safety certificate. It is good practice to service the boiler too.
  • a carbon monoxide alarm provided in any room used as living accommodation which contains a fixed combustion appliance (excluding gas cookers). This includes boilers and operational fire places/wood burning stoves. The government guidance recommends alarms with ‘sealed for life’ batteries instead of replaceable batteries, for instance
  • a smoke alarm on every storey of the property
  • annual checks of smoke detectors and carbon monoxide alarms and immediately before the tenants move in
  • fire risk assessment and chimney sweep if property has a working fireplace
  • a satisfactory electric installation condition report (EICR) every 5 years
  • an assessment of the property’s energy performance (EPC) every 10 years with an energy performance certificate of at least EPC Band E
  • data privacy registration with the Information Officer (ICO)
  • registration of the renters’ deposit in a deposit protection scheme and service of prescribed information within 30 days
  • checks that all of those 18+ have the right to rent in the UK before they move into the property.

>> Useful resourceWhat landlords need for their buy to lets

>> Related PostFire safety rules in English PRS

Tip 4: Arrange specialist landlord insurance

It is important to take out specialist residential landlord property insurance as standard home insurance policies may either not be valid or adequate. There are lots of different options available, including rent protection insurance.

Click here for a detailed guide on how to shop around for competitive quotes on landlord insurance.

>> Related PostHow to shop around for competitive quotes for landlord insurance

Tip 5: Decide how you’ll find tenants

For first time landlords, it is probably easier to use a letting agent to find tenants, until you get a better feel for the process. I initially started with letting agents on a ‘tenant find’ basis, which is an up front fee without management. I chose this as I wanted to manage the property myself.

It is relatively expensive to use a letting agent on a ‘tenant find’ basis. The last time I used a letting agent, I paid around £2,000 for rent of £1,300 pcm. This is a considerable amount of money.

I eventually gained the confidence to start letting myself using OpenRent, an online letting agency which gives access to the property portals for £69. Click here for of the OpenRent £69 Full Tenancy Creation details (affiliate link). It has worked very well for me, and I even managed to carry out my own Right to Rent checks for someone emigrating to the UK under a skilled worker visa.

If you are interested in finding tenants yourself, take a look at my comprehensive guide to finding renters without letting agents.

Even if you do use agents to find tenants, you shouldn’t leave it all to them. I have always interviewed the final shortlist of applicants, even when I used agents. Do also ask to see a copy of their referencing reports. If you have registered with the Information Commissioner’s Office, the agents can’t object.

>> Related Post: How to choose good tenants

>> Related Post: How to spot rogue letting agents

Tip 6: Decide whether you’ll manage the property yourself

This is a big decision. First time landlords often feel overwhelmed at the thought of being responsible for managing the property. Especially as letting agents often imply that you are somehow incapable of looking after it yourself. It’s actually not that difficult, once you get organised, so long as you take the time to do the training, such as the NRLA’s Landlord Fundamentals course, mentioned above.

The law does impose lots of repairing obligations on landlords. However, it’s not rocket science though. In a nutshell, landlords should ensure their rental properties are well maintained, fit for human habitation, and don’t contain serious hazards that may harm the people living there. And when a tenant reports an issue, it’s important to respond promptly. For a practical guide on what the repairing obligations mean in practice, take a look this blog post.

If you manage your properties yourself, you’ll see yourself what needs to be repaired or maintained, and make decisions to do the right thing. This will be without the filter of the managing agent.

You’ll also save a lot of money if you manage your property yourself. Fees for property management vary, but on average it’s around 12% +VAT (14.4%) of the gross rental income . There’s also likely to be a mark up on the cost of the repairs that the managing agents arrange for you, eg plumbing and electrical work. It’s a hefty amount to come out of a landlord’s small profit margin.

>> Related Post: How to self manage your buy to let

Once you agree to enter into a management agreement with an agent, it can be difficult to get out of it, without paying a fee or giving six months’ notice. They justify this by saying that they need to be paid for the tenant find. Whatever the enforceability of these penalty clauses, the contract won’t be easy to get out of without paying for a penalty or serving the full notice. Alternatively, you can always wait until the tenants leave, and then not use the agents to find new tenants.

Consequently, if there’s one thing you check in the agency agreement before signing, it’s the termination clause. Make sure you can terminate with reasonable notice after the expiry of the initial fixed term, and won’t be locked in. Circumstances change, and you may want to take over the management of the property, or decide to use another agent. For more information, look at the related posts below.

Do therefore think long and hard before getting someone else to manage the property, especially if it has been recently refurbished and is near your home. It often amounts to an expensive call centre and it can be hard to extricate yourself. Even as a first time landlord, this is not something you need to outsource. It’s a choice you make.

>> Related Post: What to look out for in the small print of letting agents

>> Related Post: What landlords need to know about full property management services

Tip 7: Prepare your property for to attract and keep good tenants

Whether or not it’s a buy to let, or your own property, it is bound to need some work before it is of a good standard for tenants to move in. Even if it is just a case of a thorough deep clean.

Ensuring your property is ship shape before letting it, will help you get a higher rent and generate more interest from high quality prospective tenants. It will also mean your new tenants can settle into their home without being disrupted by trades people.

Now is the time to repair all of the things that don’t work properly. It will save you aggravation in the future, and it’s easier doing work when it’s empty. Check the gutters and downpipes, treat any mould in the bathroom, bleed the radiators, clean the extractor fan filters etc. It may also be worth giving the property a lick of paint, or new flooring.

It’s easy to get carried away when preparing a property for renters, especially when you’re a first time landlord. Therefore, it’s important to get the balance right between making it nice for renters to live in, and not spending so much you won’t make a reasonable profit.

You’ll also need to decide whether you wish to rent the property furnished or unfurnished. It is easier from a practical point of view to let it unfurnished, as there is less to break. However, it depends on your target market e.g. student or professional sharers in an HMO may expect furniture. All of my properties are unfurnished.

The more furniture and appliances you provide, the higher the start up costs, and the higher the maintenance costs for when they inevitably break or wear out.

That said, there are certain things that all properties need to provide, like a cooker and oven, even if they are unfurnished. To find out more on what unfurnished properties usually include, read my practical guide.

I always put up curtain poles/rails or blinds in the key rooms, and a door stopper to stop the front door banging into the wall. These little touches show the landlord has an attention to detail and cares both about the property and the renters, and are inexpensive.

Don’t forget that you’ll need to comply with all your landlord responsibilities mentioned above.

Finally, take care over choosing tenants, whether you do it yourself or by using letting agents. For tips on how to attract and keep good, happy tenants, see the related post below.

>> Related PostHow to attract and keep happy tenants

>> Related PostWhat should landlords provide in unfurnished properties?

Final thoughts for first-time landlords

Everyone who starts out as a first-time landlord is on a steep learning curve, and we all make mistakes.

The key thing is to comply with all of your legal responsibilities. So long as you have chosen your property and tenants wisely, and are a good landlord and look after your tenants and property alike, is likely you’ll thrive as a landlord. Being a good landlord is good business.

Before you know it, you’ll be looking for your next one!

>> Related Post: How to be a good landlord

>> Join: The Independent Landlord Community Private Facebook Group (landlords only)

*Source: English Private Landlord Survey for 2021

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