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The process of Becoming a Landlord

A decision to become a landlord is sometimes hard to make. Letting out property involves a lot of obligation to the law and to the tenants. The property must meet certain standards for it to be considered residential. The prospective landlord must know how financially demanding the tenancy will be. All these make people who are otherwise eligible to be landlords, to fear taking on tenancy. Becoming a Landlord is easy if you are prepared for what is lying ahead.

Maintaining Profitability

The first thing you must figure out is the profitability of tenancy. Not everyone who rents his property makes profits. Rented houses are business venture like any other. Managing them involves a lot of cash flow, both in and out of the business. Property maintenance can be quite expensive. The landlord must fix lights, seal leaking roofs and repair broken pipes. The landlord may also have to pay duties and fees to estate agents, and other local government authorities who oversee real estate development. Prohibitive cost of managing properties is one of the reasons why many people fear becoming tenants.

Consider laws before choosing rates

To make profit out of tenancy, you must ensure that the amount of rent paid is more than the cost of maintaining a property. You can charge more if the property is expensive to maintain. Remember that there are government regulations that govern rates of rents. You should ensure that the rent you charge are in tandem with government regulations. High capacity properties make more revenue and profit than smaller properties. The problem with the large properties is that they may not be fully rented out. You may have to reduce rents to attract tenants into the property.

Maintenance and repairs

The quality of your property also determines how profitable it will be. Tenants usually prefer properties which meet certain standards. Water supply and drainage must be highly efficient. The interior of the units must be stylish and modern. The rooms should be painted in colors that prospective tenants find appealing. Every fixture and equipment in the property should be in good working condition. A property that meets market standards attracts more tenants. A landlord can then charge high rents and make more revenue.

Learn the rules of tenancy

A prospective landlord must be aware of legal implications of tenancy. Rules of tenancy are many and complicated. A landlord is usually required to give his tenants various documents before letting the property. This includes Energy Performance Certificate (EPC), Gas Safety Certificate, and a copy of the government guide to property renting.

The landlord must also know the type of tenancy he is getting into. Most tenancies in the UK are Assured Short-hold Tenancies (AST). The landlord of AST must protect tenants’ deposit in an approved deposit scheme. Failure to protect tenancies can result into fines or even make termination of tenancies difficult. A tenants deposit must be refunded in full at the end of tenancy unless the tenant breeches terms of agreement of the tenancy. A landlord must also ensure that his property meets safety standards of the Housing, Health and Safety Rating System (HHSRS) before letting the property.

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