There are many reasons why you might be thinking of renting out your property. Perhaps you want to try before you buy in another area, or you are moving away.
Either way, before you decide whether renting out your property is right for you, take a read through our guide which provides some valuable considerations to take before you welcome tenants into your home.
Is it financially viable?
The most important factor is to ensure that it is financially viable to rent out your property before you commit. Any rental income you receive could be taxed, this is 20% if you are a basic rate taxpayer, or 40% if you are a higher rate taxpayer. You also need to factor in letting agent fees (if applicable) and insurance costs. Once you have worked out how much you have remaining after these costs, the net amount would need to cover your mortgage payments in order to make renting out your property worthwhile.
Get to know your area
Start by having a look at the types of properties being rented out in your area. Find homes that are similar to yours and research their rental values. This will give you a good indication of what you could expect to receive and how much to price your rental property at
Understanding your responsibilities
Being a landlord is an additional responsibility you will need to fit into your life, and it is safe to assume that sometimes things will not run as smoothly as one would like. You will need to stay on top of things like your properties maintenance, rent collection and spend more on your insurance policy
Many landlords choose to involve a letting agent such as London Shared to rent out their properties. This provides you with a more ‘hands-off’ approach and takes some of the above responsibility away from you.
Talk with your mortgage lender
It is vital that you inform your mortgage lender of what you would like to do with your property in the first instance. If not, you could be breaking the terms of your contract. Your lender would usually need to supply you with a consent for lease, once you have this, you would be free to rent out your property.
Get the right insurance
As with your mortgage lender, you will need to inform your insurer that you plan on renting out your property, as your policies may need to be updated. You will also have to secure a landlord insurance policy which protects both your property and tenants.
Get your property ready
Furnished or unfurnished? This will be a decision you will need to make before marketing your property to potential tenants. You will also need to ensure that all repairs have been carried out, appliances are in working order and that your property is clean and well-presented.
Finding an agent
If you do not have time to deal with the responsibilities of being a landlord, a letting agent such as London Shared is a great option.
We offer the simplest, most stress-free way to rent out your property in London. As your dedicated property management company, we will guarantee your rent, furnish your home, and find professional tenants to look after it. Our service aims to maximise your property’s value through effective, ongoing management.
If well implemented, the guidelines listed above will protect you from stress and provide you with a financially rewarding investment.