You might think that becoming a landlord is a very intentional thing. After all, it involves buying property, making it suitable to rent and then letting it out, all of which mean some pretty big decisions. But in reality, it’s very easy to become a landlord entirely by mistake. This is known as an ‘accidental landlord’, and if you find yourself in this position, it can be difficult to know what to do next.
What is an Accidental Landlord Anyway?
Simple – an accidental landlord is anyone who has found themselves with a property they need to let out, without really meaning to. It might sound odd, but according to research around 1 in 5 landlords don’t plan on becoming landlords at all. For example, you might have been left a property in a will, or have moved to a new home but unable to sell the previous property thanks to the sluggishness of the housing market. When this happens, the rental market might be the best option, as the property can make some residual income while they wait for the property to sell. You might also be moving temporarily, maybe through a promotion or overseas assignment through work. All of these are accidental landlords.
What Happens Next?
If you find yourself in this position, you have a few choices to make. First off, if there’s still a mortgage to pay on the property, you need to chat with your provider about your plans to rent the property out. Renting a property will usually be a violation of a standard mortgage, so your advisor might suggest you move onto a buy-to let mortgage instead, or give you a Consent to Let clause. This clause covers 12 months of renting a private property, and is designed to give you some leeway to sell the property. You will also need to look at the insurance you have on the property. Again most buildings and contents insurance will not cover rented properties, and you will need to adjust your policies to stay above board.
- You should also read up on your legal obligations as a landlord. There are a lot of things to cover here, and in the next stage we will explain why having a good estate agent on your side will help here. But at the bare minimum:
- You will have the responsibility to ensure that anyone you choose to occupy your property has the right to rent under the Immigration Act 2014.
- You will need to put any deposit you take into a government-sanctioned tenancy deposit scheme, and provide your tenants with mandatory paperwork prior to the tenancy starting.
- You must ensure that your property is safe, has the appropriate energy efficiency (E or above). Safety includes carrying out gas, electrical and fire checks.
- You may have to purchase a license from the local council, depending on where your property is located, if you want to act as a landlord.
Finding an Estate Agent
For most accidental landlords, the sheer volume of things they need to do is overwhelming. The responsibility and legislation can be a bit of a minefield, and can sometimes put them off renting out the property at all – particularly if you’ve moved out of the area and don’t have regular access to the property. But that’s where an estate agent can help. A local estate agent can work with you to manage everything about your property, including photographs, inventory, tenancy’s, collecting rent and more. In other words, you can tap into their years of experience and knowledge to run your property for you, leaving you free to receive the income and not worry about the work. There will, of course, be a fee for this service, but it is almost always a worthwhile trade for the peace of mind it brings.
At Northwood, we work with a lot of people who have fallen into becoming landlords through all sorts of avenues. Our Guaranteed Rent Service is particularly popular with Accidental Landlords as it’s designed to provide peace of mind. Our team are on hand to help support you through the transition from homeowner to landlord, and to give you all the support you need to get on your feet. Whether that’s answering your questions, helping you list your property or managing your tenants on an ongoing basis, we make becoming a landlord a simple process. If you would like to find out more, get in touch with the team at Northwood today.
