Can I rent out my house? This is a question many homeowners ask themselves at one time or another, but one that requires serious consideration. Here’s what you need to know.
Demand for housing in the capital has outstripped supply for more than a decade, and as more young homeowners struggle to get onto the property ladder, the number of renters in London is on the rise. So, if selling isn’t an option you’re ready to explore, renting out your house might be a viable alternative.
In 2016, the scales tipped to reveal more renters than homeowners in London overall, and research collated by the Centre for London indicates there are more than a million renters in the capital right now. By 2025, that number is predicted to rise by 60%.
Why Do People Choose to Rent Their Homes?
There are many reasons why homeowners choose to rent out their properties. Homeowners moving in together sometimes keep one of their properties to rent out. Older homeowners deciding to downsize often keep their primary home as a letting option, and those relocating sometimes choose to rent out their properties rather than leave them empty.
Becoming a landlord isn’t as simple as it seems, however, and there are many factors to consider before taking the plunge, including how to find the right tenants, insurance, tax, property maintenance and other responsibilities.
6 Steps toward Renting Out Your House
- Research rentals in Your area
It’s important to benchmark your property against others in your area. This will help give you a better idea of the services different rentals offer, as well as how much they charge. For a closer look at average monthly rentals across the private sector in London, try this London Rents Map.
- Consider the financial viability
According to a report, the average cost to run a property in London is £6,535 per year. In addition to maintenance and upkeep, as a landlord you are required to pay tax on the profit you make from renting out your property. Your profit will be calculated by deducting allowable expenses like water rates, insurance, property management fees and general maintenance costs from your rental income.
- Speak to your mortgage lender
Many mortgage lenders structure their loans as residential mortgages instead of investment or residential property mortgages. It is essential to inform your mortgage lender that you are planning on renting out your house to ensure you are not breaking any terms of your mortgage contract.
- Update your insurance
It is essential to let your insurance company know that you are going to be letting your property so that all necessary policies can be amended. You will also need to apply for landlord insurance, which will cover you from financial losses should any accidental damage occur to your rental property.
- Prepare your property
If you decide to rent out a furnished property, it is your responsibility to ensure all appliances are in working order and that all repairs on fixtures and furnishings have been carried out. If you are renting your home out unfurnished, it is a good idea to ensure it looks fresh and presentable. According to a survey by a home furnishing retailer, the top five things that put prospective tenants off a property include:
- An unclean house - 49%
- Bad smells - 46%
- Damp - 43%
- Unkempt garden – 37%
- Badly decorated property - 35%
- Seek out a trusted lettings agent
You can save a significant amount of time and ensure greater piece of mind by allowing a professional property management service to offer support. Douglas & Gordon’s Property Management services include everything from rent collection and property visits to advice on legislation and tenant management.
Speak to an expert at Douglas & Gordon about renting out your property and discover how simple it can be to have a trusted partner to guide you through the process.