As a property investor, you have a lot to think about when it comes to preparing how to let out your property. Financial considerations and understanding the law on lettings are just two of the subjects you will need to get to grips with first before investing in property.

As a property investor, you will have to cope with ever-rising costs and expanding regulations, and this could prove overwhelming.

To help make the process as stress-free as possible for property investors, here at Just Landlords we’ve come up with five points that will help you to avoid common beginner’s errors.

Following these tips should allow you to win the gratitude and respect of your tenant, as well as protecting yourself financially.

1. Don’t skip background checks

A reference check is essential, because you must be sure that your tenants can be trusted, both to respect their property, and to meet payment obligations. If you use rent guarantee insurance and need to claim, you may in any case be required to provide evidence that you carried out initial searches.

2. Don’t ignore lettings law

You could soon come up against problems if you don’t familiarise yourself with the rules and regulations that detail the rights of both property investors and tenants, so it’s important that you do this before starting out.

For example, the Housing Act 2004 lists legislation that applies to England and Wales, requiring landlords and property investors to recognise legal standards for the private rental sector (known as PRS), with regards to conditions. You should also scrutinise the UK Government’s compilation of possible hazards, known as the Housing Health and Safety Rating System.

More regulations concern the number of occupants in a house or flat, called Houses in Multiple Occupation, or HMOs. This could apply if your property houses three or more tenants in more than one household, sharing a kitchen, bathroom and toilet.

Your options regarding evictions can vary, so it’s very important that you know what they are. Circumstances will dictate whether they need a Section 8 or Section 21 notice for England and Wales. For a re-possession case to succeed, certain legal criteria must be met. For instance, to issue a Section 21 notice, occupants with an assured shorthold tenancy (or AST) must have been given:

• The leaflet “How to rent – the checklist for renting in England”

• An energy performance certificate, known as an EPC

• A gas safety certificate

In addition, their initial deposit must be in a government-approved protection account – this is the law.

3. Don’t forget to update contact details

It’s important to exchange email addresses and phone numbers at the start of the tenancy. Check regularly to ensure that these are still correct – smooth communications can make so much difference on both sides. The tenant may need to contact you about repairs, and on your side, you need to be able to arrange inspections, giving them advance warning.  

4. Don’t neglect your property

Carrying out the regular inspections mentioned above is important, to ensure that the premises are being kept in good condition, and for early identification of any issues. Remember that at least twenty-four hours’ notice in writing must be given to tenants, and a time that is acceptable must be offered (see the Landlord and Tenant Act 1985 for more info).

5. Don’t be confused by insurance options

Insurance cover for a rental property won’t be the same as the building and contents policy on your individual home, because different problems could arise.

As a result, if you are considering cover in case things go wrong, it’s important that you take out a specialist Landlord Insurance policy. If you have a mortgage agreement for the property, which most investors will, it may stipulate this as a condition for claims, so if they ignore it, they may breach their contract. A good policy will cover malicious or accidental damage, and theft by a tenant, so it is well worth buying one.

As James Collins, Managing Director of Just Landlords – which specialises in insuring landlords – points out, letting includes many responsibilities, with one of the most important being to offer important safe and comfortable housing.

It’s not enough for investors to pursue their own business requirements – you also need to consider the effect on the lives of your tenants. Collins stresses that it’s imperative that property investors have a responsible attitude to lettings, and take heed of legislation.