Becoming a landlord is an appealing way to make money, either as a main source of income or as an additional income to supplement a day job. 

It is, however, quite a significant responsibility and there is a lot to consider and implement. 

Here is a summary of the basics of becoming a landlord, to help guide you as you embark on your new role. 

Who to inform if you want to lease a property

If you are going to be renting out a property you already own, then you need to speak with your mortgage provider. 

Failure to inform your lender that you intend to rent out your property will infringe upon the legal conditions of your mortgage contract. 

If you are wanting to let your existing property so you can buy another where you can live in, you can consider a Let to Buy mortgage. 

A Let to Buy mortgage, allows you to release equity from your property by borrowing at a higher loan-to-value (LTV). This can then be used to apply for a standard residential property for the new property you want to buy. 

Use a let to buy mortgage calculator to help work out how much you might be able to borrow. 

Know the law

When leasing a property to tenants, it is important to be familiar with the various laws that are relevant to landlords and tenants. 

Landlords are required to:

• Keep the property safe and free from health hazards
• Ensure that all gas and electrical equipment is safely installed and maintained and provide an Energy Performance Certificate for the property.
• Place the tenant’s deposit in a government-approved scheme.
• Ensure the property is fire safe by fitting and testing smoke alarms and carbon monoxide alarms.
• Allow health and safety inspections by the local council if they request to do so
• Pay income tax on rental income, minus the day to day running expenses. 

You can find detailed regulations and legal requirements on the government website.

Get insurance

Conventional home insurance policies won’t cover a landlord for rental activities. 

Although there is no legal requirement for a landlord in the UK to take out a dedicated insurance policy, mortgage providers usually insist on it. 

There is a range of insurance policies designed for landlords specifically. Policies will generally cover for damages arising from fires, storms, theft and vandalism.

Tenancy agreements

Although it is not a legal requirement in England and Wales to draw up a tenancy agreement for most tenants, it is best practice. 

In Scotland, in most cases, landlords must provide written tenancy agreements. 

A written tenancy agreement should  include the following details:

• The names of the landlord and all tenants.
• The date the tenancy began and whether it ends on a certain date.
• Details of whether other people are allowed the use of the property.
• The amount of rent payable, payment frequency and payment date.
• What is included in the rent - eg.council tax, electricity etc.
• What the landlord will be responsible for - eg. maintenance and repairs.
• The notice period required by both landlord and tenant to end the tenancy.  

Finding the right tenants

Cast the net wide and market your property in a variety of places including local newspapers and relevant Facebook groups. 

Alternatively, you can contact a letting agency to find a tenant for you but be aware that they’ll take a cut of your rental income. 

Before agreeing to lease your property to a tenant, carry out tenant checks. Ask for references from previous landlords and evidence of a stable income. 

Before the tenants move in

It is usual for landlords to take a refundable deposit from the tenant which acts as a safety net in case the tenant causes property damage. 

There's no set amount, but most private landlords ask for four to six weeks rent upfront which you are legally required to keep in a deposit protection scheme.

Make an inventory of what you are leaving in the house such as furniture or kitchen items. This will be used when the tenant moves out to see if anything has gone missing or is broken. 

Finally, once your tenant has moved in, make sure you are easily contactable should any issues arise and need addressing.