If it doesn't feel like the right time to sell, or if you're looking for alternatives to selling up, then renting out your property may be the answer. There's lot's of things you need to think about before choosing to rent out a property, both from a legal standpoint and in terms of what does or doesn't make sense in your personal situation. Below we've highlighted a number of things to consider if you're thinking about taking the step and putting your property up for rent.
It could be said that the key to successful letting is largely down to research that you do beforehand. This will help you make the right choices at the right times while always following current legislation. Take a browse online at the properties that are listed for rent in your area to see what sort of rent charges they are asking for and to see how similar they are in terms of what your property can offer. If you're going to enlist the services of a reputable local letting agent, start scoping out the options and read up on the specific letting services they can offer. If you have trusted friends or family who also have experience with becoming a landlord, speak to them and ask if there's any advice or guidance they could share with you.
There's an endless supply of information online that's related to renting out a property, so there's no excuse to not do your fair share of research beforehand. And remember, us professionals are always on hand to assist or answer any questions.
If you're struggling to sell a property or want to keep hold of it as an investment, then renting it out can be a smart alternative. It's also a handy way to change a big part of your life, such as making it possible to work abroad without selling up, exploring life in a different area for a while or traveling the world with an open ticket. While all of this is going on, it gives you the chance to use the property to earn rental income.
It will only make sense to rent out a property if the finances add up. Any income you earn from rent may be taxed at the usual rate, so you have to consider these sort of things - 20% for basic-rate tax payers, 40% for higher-rate tax payers. Tax deductions need to be taken into account as well letting agent fees, insurance fees, mortgage costs, furniture and/or white good costs if you choose to let the property furnished etc. Don't forget potential void periods as well between change of tenants, as during this time you'll be liable for all costs.
Once you've worked out all expenses you'll then be able to see if the rental income you gain makes letting a sound financial decision.
It's a good idea to contact your mortgage lender as soon as possible to discuss the fact you're interested in renting out your property. This will then give you a chance to fully understand what stance your mortgage lender will take in terms of what they'll allow you to do. You cannot simply allow tenants to move into the property and start paying you rent while you're on a standard residential mortgage - this would mean breaking the terms of your mortgage contract and could result in dire consequences, so ask their permission before you do anything.
If your residential mortgage is not in a fixed term, you may be able to switch the mortgage into a buy-to-let, either with the same lender or with a new one. A mortgage broke could help assist with this if required. Alternatively, your current lender may be prepared to offer you something called a consent to let. This is when a lender allows you to let out your property while a residential mortgage is still in place, but they tend to be reviewed after a set amount of time and may also incur additional fees and/or an increase in interest rates during the period the consent to let is active.
It's essential that your current buildings and contents insurer are aware of your intention to let the property as it's likely that policies will need to be amended. You will also have to now look into a landlord insurance policy that suits you. Landlord insurance can protect the property itself, your tenants and the investment as a whole. Some even offer to pay out if tenants miss rental payments.
You may also need to obtain a landlord licence or be registered as a landlord. There are different rules for Wales, England, Scotland and Northern Ireland, so familiarise yourself with landlord licence requirements in your particular country.
Before you list the property as available for rent, you need to ensure it's ready to attract the perfect tenant. Decide whether you want to let the property furnished or unfurnished, ensure a valid EPC certificate is in place and that the property meets any minimum legal requirements, carry out all required repairs on fixtures and fittings, check that appliances in the property are suitable and in good working condition, give the entire property a spruce to ensure it's well-presented and ready to wow potential tenants.
What I've highlighted above barely scratches the surface as there are many more things that a landlord must do before renting out a property, many of which must be legally carried out. But don't let this overwhelm you, because a local letting agent has the expertise and knowledge to not only list your property and source the perfect tenants, but also guide you through the entire process to ensure every legal box is ticked as well as offer an array of property management services to make sure things continue to run smoothly after your tenants have moved in.
If you'd like to learn more about how our expert lettings team can help you rent your property in Cardiff then get in touch with us immediately. You're welcome to call us on 02920 668585, e-mail firstname.lastname@example.org or pop into one of our three Cardiff branches.