So you're thinking of investing in property and becoming a landlord? We're certainly not ones to tell you what to do, but we feel that you've made the right choice should you invest in bricks and mortar. Being a landlord potentially means regular rental income, capital appreciation on your property and providing a good-quality home to great renters
You can check out our thorough guide for investors, but we also thought it would be a good idea to bring you the A-Z of becoming a new landlord. So, read on and discover what you need to know about purchasing a buy-to-let and renting it out, all to the handy backdrop of the alphabet.
A is for assured shorthold tenancy
The most commonly used type of tenancy agreement, the assured shorthold tenancy (AST) is a binding contract between yourself and the renter, setting out the terms of the rental agreement.
B is for break clause
Within that AST, you will most likely have a break clause. This allows yourself or the renter to end the tenancy halfway through the agreement. Eg, you can terminate the contract after six months if it's a 12 month agreement.
C is for credit checks
As a landlord, you'll want to ensure that renters moving into your home are professionally referenced and have undergone credit checks.
D is for deposits
Deposits come in two forms: holding and security. The holding deposit is the amount a renter pays to secure the property, and a security deposit sees them paying up to five week's worth of rent, which they get back at the end of the tenancy.
E is for energy performance certificate (EPC)
All landlords are required to provide an EPC of E or higher for their rental properties. The certification lasts for 10 years or the duration of a tenancy – whichever one lasts longer.
F is for fire safety
You are responsible for ensuring that fire alarms (there should be one on every floor) and carbon monoxide detectors are in working order before the renter moves into the property.
G is for gas safety
Like the EPC, landlords are required to provide a gas safety certificate that states the property's gas appliances are safe.
H is for house in multiple occupation
If your rental property has three or more renters from a different family, it is classed as a house in multiple occupation (HMO). Landlords need a licence for HMO lets.
I is for inventory
The inventory is key for everyone involved, as it documents the contents of the property. This includes fixtures and fittings – as well as their condition – and any furnishings included with the rental.
J is for joint contract
Join contracts occur when renters take on a property together, with each one sharing the same responsibility of the rental.
K is for kettle and other furnishings
You can let your property furnished or unfurnished, though many renters prefer to find a property that already has furniture. If you go down the furnished route, make sure that you don't forget the kettle.
L is for landlord insurance
Otherwise known as building insurance, landlord insurance covers the external area of the building as well as your property and its fixtures and fittings. Some buy-to-let mortgages require you to have landlords insurance before they lend.
M is for maintenance
You will be responsible for repairs around the property. This can be handled by yourself or a property manager.
N is for notice
Both landlords and renters give notice to signal that they want to end the tenancy. Landlords typically need to provide two months notice, while renters only need to provide one month.
O is for Ombudsman
Landlords and renters can use The Property Ombudsman and The Property Redress Scheme process complaints about letting agents or managing agents.
P is for property manager
A property manager is someone you can hire to manage the rental while a renter is living there. They will arrange maintenance and manage the day-to-day tenancy.
Q is for questions
Whether you're using a letting agent, a rental-first platform, or screening renters yourself, ask questions to understand how processes work.
R is for rent
This is the big one and a primary reason for being a landlord. The rent is, of course, the income you receive from the renter for your buy-to-let property.
S is for stamp duty
Landlords are required to pay a 3% surcharge on stamp duty. However, the current stamp duty holiday (ends March 2021) has reduced the amount.
T is for tenancy deposit scheme
When you receive the security deposit from the renter, you must place it in a security deposit scheme and notify renters of your chosen option within 28 days.
U is for unfurnished
Furnished or unfurnished; that's the question. As a landlord, you can rent out a property with just the fixtures and fittings but no furniture.
V is for voids
Every landlord's worst nightmare, a void period is the amount of time a property sits empty without a renter living there.
W is for winning
Which is what everyone will be doing if you're a good landlord who fulfils their responsibilities and you have good renters who take care of your property.
X is for xoxo
Y is for yields
The amount of money you make when comparing the rental income to how much you paid for the property.
Z is for zero deposit
The zero deposit scheme offers renters and landlords the same amount of protection as a regular deposit without the huge financial outlay for renters. Therefore, they might just have that little bit extra in their rental budget.
Now I know my ABC
There is plenty that you need to know if you plan on becoming a landlord. Our A to Z should provide a solid breakdown of some of the most important aspects of renting out your property. For more information on all things renting, check out our landlord hub and become a pro buy-to-let owner and landlord.