Guide to becoming an accidental landlord - Part 1 | CPS Homes

Guide to becoming an accidental landlord - Part 1

Cath, assistant lettings manager at CPS Homes in Cardiff, South WalesCath, Assistant Lettings Manager, brings us part 1 in this 2-part series to help accidental landlords make their first foray into the property lettings industry...

Estimated reading time: 4 minutes.

Society will have us believe that all landlords are wealthy entrepreneurs with huge portfolios of properties and a never-ending stream of income, but more often than not this absolutely isn’t the case. There are many landlords who live normal lives with normal jobs and have a property investment or two on the side. They still have property income taxes to pay, void periods, changes to the law to keep up to date with, overall maintenance of the property, not to mention the vast array of other potential problems that can arise from letting out a property.

So, what we’re trying to say is that although being a landlord can certainly prove extremely profitable in the long run - when done right - it isn’t all plain sailing to the bank.

Planning to become a landlord by investing in property is one thing, but life can become extremely stressful and difficult for those who find themselves becoming an accidental landlord.

To help those homeowners who find themselves in a situation that sees them being forced into letting out their property, we’ve put together this two-part guide so that you’re aware of some important things to put in place.

What is an accidental landlord?

An accidental landlord is someone who finds themselves in a situation where they have to let out a property when they didn’t necessarily plan to do so.

Examples of an accidental landlord include those who:

  • Have to move but can’t sell their home
  • Are temporarily working abroad and will be returning
  • Have inherited a property but can’t sell
  • Can no longer afford to live in the property

If you fall into one of these categories or something similar, and now find yourself on the verge of becoming an accidental landlord, there are several things you should do to ensure your sudden venture into property letting is a success.

Inform your mortgage lender and any necessary property managing agents

The first thing you’ll want to do is inform your mortgage provider and any managing agents (usually applies to apartments and flats) of your sudden intention to let out the property. The property management agent will be able to confirm whether or not you can let out the property, and if so, advise on any steps you’ll need to take with them.

When it comes to your mortgage lender, if you are in a fixed term, they may be able to offer you consent to let for a period of time. If you are not in a fixed term or your fixed term is set to end very soon before you let out the property, you could speak with a mortgage broker to discuss buy-to-let mortgages that may be available to you and to gain a better understanding of your finances.

In any case, the main goal is to ensure you’re going to be on the right type of mortgage that allows you to let the property, and to know what costs are going to be involved - such as any fees due to a change in mortgage product or even lender, which would also involve conveyancing solicitor fees etc.

Research landlord’s insurance

Your normal home insurance won’t cover the things you’ll need insured while letting out the property, so you’ll need to speak with home insurance providers to get a quote for rental properties. You will likely have to pay more for landlords insurance, but without it you won’t be correctly covered.

Work out how much rental income you can expect

Once you’ve gained an understanding of all these monthly outgoings, the next thing you’ll want to do is make sure you can actually generate enough rental income to at least cover all of these costs. This includes mortgage payments, insurance, maintenance charges, plus any other fees, charges, or ongoing bills you may have to pay.

Consider future costs as well, such as tax, void periods, re-mortgages, letting fees, and any other costs such as annual boiler checks. It’s always worthwhile building up a savings pot that you can dip into whenever necessary to cover unexpected costs.

Read: Our guide to mortgages

So, that’s the end of part one, and following this advice should put you in a strong position moving forward as you can now be sure that everything is financially viable. The next part will look at how a letting agent can help, legislation and regulation surrounding property investments, and property income tax.

Here at CPS Homes, we have a wealth of experience when it comes to letting out properties in all corners of Cardiff, so whether you’re an accidental landlord or a seasoned property investor, our friendly lettings team are here to help. Call us now on 02920 668585, e-mail enquiries@cpshomes.co.uk or pop into one of our three Cardiff based branches.

11 May 2022

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