How-to guide for first-time landlords

We have drawn upon the wealth of experience within our team to provide you with help and guidance on the steps involved in becoming a landlord. 

Step 1

Is buy-to-let for you?

  • Buy-to-let is usually a medium-to long-term investment.
  • House prices can go down as well as up (returns are not guaranteed).
  • Being a landlord means you are running a business, not having a lucrative hobby! You must take responsibility for your business.
  • You must be willing to learn the legal intricacies of being a landlord.
  • You must be willing (and able) to spend money on your investment property throughout your ownership of it.
  • You should be happy to let to people who may not share the same values or religion as you.
  • You must be prepared for almost anything – problems occur, tenants can be rude or inconsiderate and a boilers could always break at five to midnight on Christmas Eve.
  • Find out about the eviction laws in this country before you go into buy to let – not every landlord will suffer a bad tenant, but if they do it can take up to three months or more to evict them. You should always plan for damages and long periods without rent.

Step 2

Identify your target tenants

  • First of all, who would you feel most comfortable dealing with?
    • Students
    • Young professional sharers
    • Families
    • Couples
    • People on benefits
    • Corporates
  • Once you know who you want to let to, you can start to look for a suitable property to meet their needs.
  • You can target more than one tenant group with the same property type.

Step 3

Research your market

  • Most first-time landlords invest close to home – which is sensible, as you can get to your property quickly if needs be – but you can invest anywhere in the UK.
  • Consider areas that are popular to live in. Look for the following:
    • areas with good transport links
    • decent shopping facilities
    • good schools
    • large employers (such as a hospital)
    • areas with high student demand
  • Contact local lettings agents to:
    • discover the rents other landlords are charging in your area
    • find out how long properties take to let in the area
    • what their fees are like

Step 4

Decide if you want to self-manage or use a letting agent

  • Both approaches have their merits:
    • Self-managing is suitable if you are prepared to put the time in. Be honest with yourself – if you work full-time, have children to care for and/or a busy social life, will you really be able to ‘fit in’ managing your buy to let?
    • A good letting agent can help you to find a tenant, manage your property repairs, carry out inspections and collect rent, amongst other things.
  • If you do use a letting agent, make sure they belong to a trade body. This ensures you have some recourse if things don’t go as expected.

Step 5

Is buy to let financially viable for you?

  • Create a financial plan before you invest
  • You need to account for the following upfront costs:
  • You will also need to include the following ongoing costs:
    • Maintenance and repairs
    • Cleaning and redecorating between tenancies
    • Income tax on your rental income
    • Insurances (landlord’s insurance, rent guarantee insurance and life insurance are recommended)
    • A contingency fund
    • Legal advice (should you need it)
    • Letting agency management fees (should you choose to use a letting agent)
    • Voids (periods where the property is empty; experts advise that you account for at least two out of every 12 months)

Step 6

Find a suitable property

  • Write a list of the attributes that will appeal to your target tenants
  • Spend as long as you need finding a suitable property that meets these requirements
  • Use the Commercial Trust rental yield calculator to determine the likely rental yield
  • Only buy if you are sure you will make a return

Step 7

Get a buy-to-let mortgage

  • Get in touch with the team at Commercial Trust
    • Call us on the numbers at the top of this page
    • Or fill in our quote request form
  • Once you have got in touch with us, we will
    • Make sure you can afford the property you wish to buy
    • Find the most suitable mortgage product to meet your needs and affordability
    • Obtain a decision in principle from the lender – often we can do this within just two hours
  • If you are happy to go ahead at this stage, then we will complete your full mortgage application. We will then:
    • Pass your case to a specialist mortgage administrator who will help make sure the lender gets all the documentation they need to offer you the mortgage
    • Offer ongoing support and advice – many of our advisers are landlords themselves
    • We provide some useful landlord downloads to help you run your business
    • Regularly update you with news pertinent to landlords – such as new laws that may affect you

Step 8

Prepare your new property to rent out

  • Once you have the mortgage in place, your offer has been accepted and the keys are in your hand you can start to prepare the property for tenants
  • Familiarise yourself with the health and safety requirements of being a landlord, and comply with the law
  • Start to put together an address book of useful contacts such as plumbers, electricians, builders and cleaners located close to the property. Make sure you have at least two of each so if one is too busy to help you can always call on another
  • If you plan on redecorating the property, choose neutral colours so it appeals to a broader market
  • Make sure the property is clean and ready for a tenant to move in.
  • Carry out a full inventory of the property. You may want to get a professional inventory clerk to do this, or you can do it yourself. Make sure you take photographs of everything, especially new items such as carpets or doors. Note down any imperfections that you intend to leave unchanged
  • Put together a pack of all the household manuals for appliances such as cookers, boilers and fridges – it may be worthwhile you photocopying the originals, as these things can be easily thrown away or taken (inadvertently) by the tenant
  • Make a list of emergency contact details for the tenant
  • Get the keys cut – make sure you have one for each tenant. Some landlords choose to keep a spare in case their tenant gets locked out or repairs need doing whilst the tenant is at work

Step 9

Find your perfect tenant

  • If you choose to instruct a letting agent then the task of finding a suitable tenant falls within their remit. It would be a good idea, however, for you to arrange to meet the tenant prior to them moving in.
  • If you choose not to use a letting agent, then read this article on finding a tenant.
  • Make sure that whoever finds your tenant references the tenant fully. This should help you avoid letting your property out to someone undesirable.
  • You can ask your tenant to provide a guarantor who will agree to pay the rent if the tenant fails to do so – if you do ask for this, then make sure you reference the guarantor as well as the tenant.
  • Get an Assured Shorthold Tenancy agreement drawn up. We have a free one available from the downloads section of the Commercial Trust website/
  • Make sure if you take a deposit that it is protected by one of the government approved schemes – this is a legal requirement and if you fail to do it you could be opening yourself up for all sorts of problems.

Step 10

Be a good landlord

  • Join a landlords association
  • Always give your tenant 24 hours’ notice if you plan on taking a visit, and always ask for permission to enter (otherwise you’ll be trespassing)
  • Keep on top of repairs
  • Respond to emergencies promptly
  • Be flexible and approachable, but remain professional at all times
  • Keep good records in case you need to refer to something several years down the line

Guide To Being A Landlord For Web

This information should not be interpreted as financial advice. Buy to let mortgage rates are subject to change. Speak to our advisors for a mortgage illustration.

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