The ultimate checklist for getting started with your buy-to-let
So you’ve got your mortgage, and you’ve bought your new rental property. Now what? We’ve partnered with OpenRent to break down the essential to-dos for new landlords.
1. Check you have permission to let the property
First off, check your lease and your mortgage terms to see if there are any restrictions.
If the property is a leasehold, you’ll need to check you have permission to let it. Your lease may have certain restrictions on letting the property that you’ll have to follow, and you might need to get written consent from the freeholder. You’ll want to double check your mortgage terms too, in case there are any restrictions.
2. Get any licences you need from your council
You’ll need to follow national and local landlord regulations. If your property is a home in multiple occupancy (HMO), you’ll need to get an HMO license from your council. Local authorities also sometimes have something called “additional and selective licensing,” which your property could fall under (even if it’s not an HMO), so check your local council’s website to see if they ask for extra licensing.
3. Get performance and safety assessments done
You’ll need an energy performance certificate (EPC), which rates how energy efficient your property is on a scale of A to G (A being the most efficient, and G being the least). You’ll have to renew yours every 10 years, and make sure your property is rated E or above before you can let it.
If your property has a gas supply or appliances (like a gas boiler), you’ll also need a gas safety certificate from an engineer who’s registered as Gas Safe.
You’ll need an electrical installation condition report (EICR) to show that everything is safe. If your property is an HMO, you’ll also need a Portable Appliances Test for the oven, fridge, and any other appliances you’re supplying.
In England, you’ll have to make sure you install a working smoke alarm on every inhabited floor. You’ll also need a carbon monoxide alarm in any inhabited room with an appliance that burns solid fuel (like coal or wood). Make sure all your alarms are working properly before anyone moves in!
If you’re letting your property furnished, the furniture will need to meet fire safety regulations (check the furniture labels to make sure). If your property is an HMO, you’ll have to meet a few more fire safety requirements.
Last but not least, you’ll need to get a legionella assessment.
4. Get your insurance sorted
Don’t forget about insurance! You’ll need building insurance, as well as contents insurance for any furnishings you provide. Once you find tenants, you should also set up a Rent Guarantee Insurance policy so you’re protected in case they stop paying rent.
5. Find the perfect tenants
Finding the right tenants can sometimes be the hardest part of letting. Luckily, OpenRent lets you advertise directly to tenants for free – you stay in control, and they’ll help with referencing, contracts, and more if you need – to put you on the best footing for finding your ideal tenant.
6. Carry out tenant checks
You’ve found tenants, hooray! Now you’ll have to carry out a Right to Rent check on them – basically, checking they have the right to rent in the UK. That means inspecting a valid combination of ID documents (in their presence) and making photocopies.
7. Get your tenancy set up
To create a standard tenancy, you’ll need to create an agreement called an “Assured Shorthold Tenancy,” (or use OpenRent’s!) which both you and your tenants will sign.
8. Register your tenant’s deposit
If you take a deposit, you’ll need to register it with a government-backed deposit protection scheme. You’ll have to tell your tenant about the scheme and explain how you’re protecting their money within 30 days of receiving it. You’ll also need to give your tenant the “How to Rent” leaflet – the UK’s checklist for renters.
9. Do an inventory
Before your new tenants move in, you’ll want to carry out an inventory of your property: a list that describes the condition of each room and part of the property, and any furnishings. Give this to your tenants, and ask them if they want to suggest any changes, and then sign and date it once you’ve both agreed on everything it says.
10. Make sure your tax is set up
Like all income, rental income is taxable. Make sure you’re set up to pay the right amount. You’ll need to pay tax if you earn more than £2,500 from rent (after subtracting expenses). If you only have one or two properties, it might be easiest to simply declare what you’ve made in the property section of your Self Assessment tax return. Either way, you should always get professional advice when it comes to working out taxes. It’s worth noting that new tax rules are being phased in that mean landlords can only deduct 20% of the cost of their mortgage interest from their taxable rental income. Before, you could deduct the full amount of mortgage interest costs before you paid tax on rent earned. (You can read more about taxes for buy-to-let income here.)
Landlord admin, sorted
Phew! Seems like a lot, but now you can sit back knowing you’ve dotted your i’s and crossed your t’s. And if you want even more help, try OpenRent. They can make a lot of the big stuff simpler, like finding the right tenants, referencing, and sorting out contracts.
Let OpenRent handle your landlord admin for just £49.