Let It Yourself
There is a financial incentive for landlords who forgo letting agents. Fees vary, but in general letting agents will charge between 15 and 20 per cent of the rental income to find and screen a suitable tenant and manage a property, so the bill can run into hundreds or even thousands of pounds a year depending on the rent charged.
Landlords who go it alone must be willing to invest a considerable amount of time, and be prepared put up with the hassle and worry that can ensue. The process should be more straightforward if the property is to be let to family or friends - although it is still vital to follow all the proper procedures and complete the relevant paperwork. It can be extremely difficult, however, if the investment property is a significant distance from the landlord's home and in these circumstances serious consideration should be given to employing the services of a letting agent.
Find Suitable Tenants
Without a letting agent, it is the landlord who will have to advertise and market the property and, in general, that means it will take longer to find suitable occupants. This means lost rental income and, as most tenancy agreements last only six or 12 months, the landlord must be willing to go through the whole process on a regular basis.
Once suitable tenants have been found, the terms and conditions of the let have to be agreed with them. Details of who will be responsible for what are laid out in the terms of the tenancy agreement, but typically it will be the landlord's responsibility to:
- Repair the property.
- Pay the building insurance.
- Pay any ground rent and service charge where applicable.
- Insure any items, such as furniture and kitchen equipment included in the property.
- Not discriminate on the grounds of sex, race, sexual orientation, age, religion, marital status or disability.
The exact costs the tenant must meet will be agreed and stated clearly in the tenancy agreement, but, in general, it will be the tenant's responsibility to:
- Pay the rent and deposit.
- Take responsibility for and pay or make a contribution towards Council Tax, water rates, gas, electricity and telephone charges. Pay or make a contribution towards inventory and tenancy agreement costs and administrative charges.
- Return the property at the end of the tenancy in the same condition as at the start of the tenancy allowing for fair wear and tear.
If the property is let out to private individuals and the rental income is under £25,000 per year, the tenancy automatically becomes an Assured Shorthold Tenancy (AST). Most ASTs lasts for six to 12 months, unless a fixed term for the tenancy is agreed in advance with the tenant.
When the fixed term of the tenancy has expired, the landlord can regain possession of the property provided two months' written notice is given to the tenant. Also, if the tenant owes at least two months' rent, a landlord can apply through the court to seek a possession order.
Any landlord managing their own property will have to hold the tenancy deposit and so must belong to an authorised scheme that protects the deposit during the tenancy and deals quickly and independently with any dispute over its return at the end of the tenancy. The landlord must inform the tenant within 14 days of the deposit being paid which one of the three authorised schemes the deposit is protected by and provide details of the scheme.
