4 Mar, 2024
First Time Landlord Checklist: The Accidental Landlord’s Guide
Being a first time landlord can feel overwhelming. If this is the first time you’ve let out your house then there’s a lot to learn to ensure your property is appealing, safe, and most importantly, compliant with the law.
There’s lots of reasons why people become landlords. For example, perhaps you’ve secured a new job somewhere else and now your home is available. Or maybe you’ve inherited a house and you’re thinking about ways to earn some extra income?
According to the Office for National Statistics (ONS), annual private rental prices increased by 5.1% in Scotland in the 12 months leading up to March 2023, showing that this is an effective way of generating some extra cash.
Furthermore due to the instability of the housing market, an increasing number of people are finding themselves becoming an accidental landlord. Faced with challenges in selling their homes, they are increasingly considering the appealing option of renting them out instead.
Regardless of why people find themselves in this scenario, the process can feel daunting which is why we’ve put together the first time landlord checklist to help keep you right.
This runs you through the process from start to finish, from ensuring you have the right type of mortgage, to carrying out safety checks, to deciding whether to let your home out as furnished or unfurnished.
So, let’s get started.
First Time Landlord Checklist
To simplify the process for first-time landlords, we're taking you through this process step-by-step. View this as your checklist so you can go through and tick off each of the points covered below.
Understand your legal responsibilities
Understanding your legal responsibilities should be your first priority as a first time landlord as you want to make sure you’re doing everything correctly!
One option can be to use a letting agency who will manage this process on your behalf, but some people prefer to do this independently.
In Scotland, landlords must adhere to several legal obligations, which we have outlined below:
- Provide tenants with your name and address so they know how to contact you
- Register the tenant's deposit with an approved tenancy deposit scheme
- Provide tenants with a tenancy agreement
- Take appropriate action in the case of anti-social behaviour by tenants in or around your property
- Present an Energy Performance Certificate to potential renters
- Conduct a Legionella Risk Assessment
- Comply with gas, electricity, and other safety requirements
- Install fire alarms in specified rooms as mandated by legislation
As noted above, partnering with a professional lettings agency would take some of the pressure off your shoulders as they will manage this for you.
At Saltouns, we specialise in streamlining the letting experience and optimising your property's income. With our team of seasoned experts dedicated to the letting process day in and day out, we ensure the process runs as smoothly as possible, This allows you to unwind with confidence, knowing that your property is taken care of.
To find out more about what we do, request our free information pack here.
Sort out your mortgage
First-time landlords are required to notify their mortgage lender if they intend to rent out their property.
Most mortgage agreements include a clause known as the "consent to let" clause, which outlines whether you can rent out your property and under what conditions.
Notifying your mortgage lender is crucial because renting out a property without their knowledge may violate the terms of your mortgage agreement. If you fail to inform your lender, you could be in breach of contract, and this might have serious consequences.
When you notify your mortgage lender of your intention to rent out the property, they may take different actions. They might:
- Grant Consent to Let: Some lenders may grant you permission to let out the property. In such cases, there may be no immediate change to your mortgage terms, but they might review your mortgage at the end of the existing term or when you apply for a new deal.
- Impose Conditions or Change the Mortgage Terms: Some lenders may agree to let you rent out the property but may impose certain conditions or adjust the terms of your mortgage, such as increasing the interest rate.
- Refuse Consent: In some cases, a lender may refuse to grant consent to let, and you may need to either sell the property or switch to a buy-to-let mortgage.
It's important to check the specific terms of your mortgage agreement and, if necessary, seek advice from your mortgage lender or a financial advisor to understand how renting out your property may affect your mortgage and what steps you need to take to comply with the terms of your loan agreement.
Failure to comply with the terms of your mortgage could lead to serious consequences, including potential legal action by the lender.
Meet repairs standards
As a landlord overseeing a rental property, it’s your responsibility to carry out necessary repairs, ensuring the property complies with the repairing standard—an essential benchmark for all privately rented properties.
To meet this standard, the following actions are mandatory:
- Check the property is both wind and watertight
- Ensure the structure and exterior (like the walls and roof) are in a reasonable condition
- Fit suitable fire detection devices
- Fit Carbon Monoxide Detectors
- Ensure the water, gas and electricity are in good working order
- Make sure any furnishings can be used safely by the tenants
Additional considerations essential for fire safety in rental properties, catering to both single and multiple occupants, include:
- Installation of a smoke alarm in the primary room used for general daytime living
- Placement of smoke alarms in all circulation spaces on every floor, such as hallways and landings
- Implementation of a heat alarm in every kitchen
- Ceiling mounting for all alarms
- Interlinking of all alarms
- Provision of fire blankets in the kitchen
- Placement of fire extinguishers in hallways
- Installation of fireproof doors throughout the property
Find out more about the meeting repairs standards here.
Decide on furnished vs unfurnished
One of the biggest questions faced by first time landlords is whether to let their house out as furnished or unfurnished.
The latter might be easier, but if you have furniture already in the property, paying for storage can be costly.
Furthermore, a furnished property can be a good selling point as it saves tenants from having to spend more of their own money. However, on the other hand, you also have increased the risk of things being damaged if you provide the property as being furnished.
We’ve summarised a list of benefits for each option below:
Benefits of renting a furnished property:
- Less expensive - Shelling out for expensive furniture and such can be a bore at the best of times, let alone straight after moving home! Renting a furnished property will help keep your costs lower.
- Greater flexibility - Renting a fully furnished flat makes sense if you’re in between properties or simply looking for somewhere to stay for work on a short-term basis.
- Highly convenient - Fully furnished properties offer the greatest level of convenience. This is especially true if it’s your first property, you’re moving from another furnished home, or if you’re in need of a rental you can walk into with just a suitcase in tow.
Benefits of renting an unfurnished property:
- More personal - This is a big one for many renters. Unless you are in the market for a high end property with brand new furnishings throughout, nothing is going to match up to having your own items around you. Opting for an unfurnished pad gives you the chance to really make it feel like home.
- Potentially less expensive - Wait...what? How can it be less expensive for both options? Well, if you’re looking to rent long-term, then an unfurnished property could actually work out to be more cost-effective. Rental charges will generally be lower, which could make buying your own furniture a less expensive option if you are going to rent for a while. Plus, you can always take the furniture with you...even if you buy your next property.
- Fewer deposit worries - Let’s face it, accidents happen, but if you do inadvertently happen to spill coffee on the couch or manage to break the bed, you’ll often either be liable to replace it in a furnished property or run the risk of losing your deposit. Opting for an unfurnished rental negates this worry...although you will have to replace your own stuff if you’re clumsy!
Take out landlord insurance
To safeguard your investment and mitigate potential risks associated with renting, it is highly recommended to secure landlord insurance through a specialised provider.
Unlike standard residential policies, landlord insurance is tailored to address the unique challenges and liabilities associated with renting out your property.
Whether you are leasing it as furnished or unfurnished, taking out landlord insurance ensures that you are adequately protected.
If your property is unfurnished, you’re unlikely to need contents insurance.
By securing landlord insurance, you are addressing the specific needs and risks that come with being a property owner in the rental market, providing you with peace of mind and financial protection.
Get your paperwork ready
Before marketing your property to potential tenants, we advise you to prepare the necessary documentation based on the type of tenancy.
In the case where your tenant has rented the property on or after the changes in private residential tenancy regulations on December 1, 2017, it is essential to have a tenancy agreement or written tenancy terms that align with the private residential tenancy framework which you can find here.
Additionally, you are required to provide the tenant with either the 'Easy Read Notes for the Scottish Government Model Tenancy Agreement' or the 'Private Residential Tenancy Statutory Terms Supporting Notes'. These are designed to help the tenant understand their rights and responsibilities before their tenancy starts. The notes provided depend on the specific tenancy type.
For those who rented your property before 1st December 2017, the documents you will need are a:
Decide how to manage your property
Deciding whether to manage your property independently or to partner with a letting agency is a crucial decision for first-time landlords.
Whilst managing the property independently might give you more control, it requires a great deal of time and effort.
For instance, it will be your responsibility to advertise the property, screen tenants, collect rent, manage late payments, and handle any disputes or complaints.
This can be a lot of pressure and you’ll need to familiarise yourself with the rental market and the necessary legal frameworks.
On the other hand, by partnering with a professional letting agency, they manage this on your behalf and they’re the experts in the field.
If you’re considering a letting agency, research reputable companies in your area, understand their services and fees, and assess whether their expertise aligns with your needs.
First Time Landlord Checklist: The Accidental Landlord’s Guide
Being a first time landlord can be challenging, but we hope this checklist has helped!
Use it as a guide when you begin to let out your property to ensure you’ve covered all bases and fulfilled your responsibilities.
From understanding legal obligations to securing adequate insurance, screening tenants, and establishing effective communication channels, each point on the checklist plays a crucial role in laying the foundation for a successful landlord-tenant relationship.
At Saltouns, we’re proud to have a knowledgeable and local lettings team working on your behalf. We'll make your investment more profitable and your life easier by taking care of the process ensuring the tenancy runs smoothly. We’ve been in the market since 2002 and we have established ourselves as trusted partners in property management. To find out how we can help, get in touch.