Tips and Guidance for Letting Your Property Without An Agent

An increasing number of landlords are choosing to self-manage the letting of their properties.

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Technological advances have made it quicker, more efficient and cheaper for landlords to self-manage.

With online credit checks and Landlord Associations like the British Landlords Association, which is free to join, landlords can feel confident they can manage their properties.Many landlords still use a letting agent to find a tenant, where agents source a tenant for the landlord for a fee. The fee is a one-off, and the landlord then manages their property themselves.

Letting agents have access to large property search portals like Rightmove and Zoopla. Private residential landlords can’t justify a 12-month subscription which may cost over £600 per month.However, that problem has been eliminated by Mashroom. Mashroom is a very competitive and quick way of dealing with the letting process, providing a much-needed service that was missing.

With Mashroom, you’re provided with all the services you need to let and manage your property. This guide discusses best practice for renting out your property without a letting agent, and how Mashroom can help you easily manage your tenancies.

Tenant referencing and credit checks

Credit checks allow you to see a tenants credit history prior to renting to them. The checks generally include :

• affordability
• employment status
• court judgements
• electoral roll check
• date of birth check
• checks on previous addresses
• reference from a previous landlord and employment references too

This allows you to rent with peace of mind. Purchase tenant referencing with Mashroom.

Preparing your property to rent

Neutral colours are more appealing to prospective tenants as this allows renters to picture themselves living in the space. This also makes it easier for each check-in and check-out.

The general sprucing of outdoor spaces helps and makes the property more attractive to rents.

Consider hiring professionals to give your home a deep clean. Professional cleaners will clean everything, including things like doors, windows, oven etc.

Ensure you have spare keys that a tenant may need for windows and doors or gas and electricity meters. You should keep spare keys for your use in the future or if the tenant loses a key.

Do not forget to give the tenant instruction manuals for the boiler, alarm system, cooker, and any white goods, so the tenant has them to hand as soon as they move in. Keep copies for yourself, too.

Frequent change of tenants usually affects your income and expenditure, so avoid taking tenants that are going to stay short term, unless you specifically want to let short term.

How do you work out the rental value of your property? You can check Zoopla and Rightmove to look at comparable properties in the area. Alternatively, invite letting agents give you a free no-obligation rental value of your property.

Informing your mortgage lender that you’re letting the property

Unless you have a buy to let mortgage, you may need to inform your lender you intend to let your home. Most lenders will charge you a higher interest rate if you decide to rent your home.

Check the terms of your mortgage before contacting the lender. Failing to tell your mortgage lender could mean you are breaking the terms of your mortgage contract.

Landlord tax

Suppose you are entering the property investment market as a newcomer. You must consider if you are going to buy any property in your name or through a limited company.

In some cases, it is efficient and more profitable to buy and let through a limited company. You will need to seek professional tax advice on this.If you are letting your home, you will likely have to pay income tax on rental income.

If you earn more income than the personal allowance, you will pay income tax at the rate you currently pay, unless the additional rental income takes you into a higher tax bracket.As of 2021, you can no longer deduct mortgage interest from your rental income.

If you own the property with another person, you will each pay tax on the portion of the property you own. For example, suppose you are a higher rate taxpayer and the co-owner is a lower rate taxpayer and you own the property 50/50.

In that case, you have to split the rental income between you 50/50 when you declare your earnings on your tax returns. It is not possible, for example, to own a property 50/50 and then the lower rate taxpayer to declare 100% of the rental income on the tax returns to pay lower tax.

Due to tax changes, it is no longer possible as parents to own a student let and your child to declare the rental income as theirs and therefore pay no tax. British Landlord Association members have free access to an accountant for tax advice and the free tax platform.

If you are renting a room in the house that you live in, and you pay all the bills, then the tenant does not have an exclusive occupation. In this case, the correct agreement is likely a lodger agreement.

Insurance for landlords

Some people renting out a property for the first time wrongly think that a standard home insurance policy will cover them for the letting.

You should check your insurance policy thoroughly and speak to the insurer if you need to. Informing your insurance broker may increase your insurance premiums and ensure your policy is valid and will pay out for any claims you make.

If you have separate contents insurance, you must inform the insurer of your intention to let your property. Your insurance policy will probably need to be amended.

Consider covering any financial losses connected with your rental property like rental loss and eviction costs.

While insurance is not a legal requirement, it is advisable to take a landlord insurance policy to protect the building, your tenants, and your investment.

With Mashroom, you can purchase Contents Insurance, Rent Guarantee Insurance and Home Emergency Insurance, ensuring your property is fully covered.

EPCs for landlords

Energy Performance Certificate is a requirement; you should have one. An EPC is valid for up to 10 years, and you are required to give an EPC to the tenant before the tenancy commences.

You can purchase an EPC through Mashroom.

Renting and fire safety

Under the Furniture and Furnishings Regulations 1988. As well as checking electrical wiring and appliances, you must make sure that any upholstered furniture you provide is fire resistant.

Landlords can be fined and imprisoned if they do not follow fire safety regulations.

The Housing Health and Safety Rating System (HHSRS) is used by councils to ensure that properties in its area are safe for the people who live there.

If you own a property and rent it out, the council may decide to do an HHSRS inspection if your tenants have asked for an assessment.

According to its seriousness, an HHSRS hazard rating Inspectors look at 29 health and safety areas and score each hazard they find a category between 1 or 2.

Smoke alarms and carbon monoxide detectors

There should be working smoke alarms on each floor and carbon monoxide detectors in any room heated by solid fuel.

Deposit legislation

Since April 2007, legislation requires landlords in England and Wales to safeguard their tenants’ deposits in one of three government-approved tenancy deposit protection (TDP) schemes.

You are legally required to protect the tenant’s deposit within 30 days of taking the deposit. Once the deposit is protected, you are required to provide the tenant within 30 days with the deposit scheme certificate and the prescribed information.

The schemes which landlords can join are:

• The Deposit Protection Service (DPS)
• MyDeposits
• The Tenancy Deposit Scheme

When using Mashroom, deposits are placed in MyDeposit for you.

Inventory 

You should obtain an inventory; you can attempt to do this yourself if you want. British Landlords Association members can download a free inventory template from the document section.

If you do not have an inventory that has been checked and signed by the tenant then you may potentially have problems applying any deductions from the deposit money.

For this reason, it is best to have an inventory in place to avoid contention when the tenant is vacating.

You can purchase an inventory via Mashroom, carried out by an independent professional.

Gas safety

You are required by law to ensure you conduct a gas safety inspection using a gas safe registered gas engineer. This must be done each year, and you must make sure all gas appliances are safe to use.

You can purchase a Gas Safety Certificate through Mashroom.

Electrical safety

It is also a good idea to make sure all electrical appliances and wiring are regularly tested too.

The Electrical Equipment (Safety) Regulations 1994 require you to ensure that wiring, plug sockets and any electrical appliances you have provided are safe.

Electrical appliances

PAT testing does not have specific frequency requirements. Instead, it is a recommendation based on factors including the location, frequency, and type of equipment.

It is recommended that smaller appliances undergo PAT testing every two years to ensure they are properly working.

When letting, do I need a license?

Some areas require a license from the local council if you are looking to let a property. Contact your council to check to see if you need a license.

How to Rent Guide

You are required to provide your tenant with a How to Rent Guide when letting a property.

When you rent with Mashroom, a How to Rent Guide is sent out automatically to your tenant(s) alongside the tenancy agreement.

Landlord Associations 

The British Landlords Association is the only free national landlord’s association and the only one that represents and supports residential and commercial landlords.

Landlords can obtain accreditation and do courses to ensure they are equipped to manage their properties efficiently.

You can take the COVID-19 landlord course, which is free, and it comes with a free certificate.

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