Rent residential property

Buying a property combined with becoming a landlord requires a significant commitment, so make sure you've considered whether it's suitable for you. Research the buy-to-let market and make sure you're buying at the right time and in the right place. Do your sums to work out if you can afford the deposit and if the expected rental yield is worth it. If you're renting an existing property with a mortgage, you should obtain the lender's consent to the letting and you may need to change your mortgage product to a 'buy-to-let' mortgage. Also contact your building insurers to tell them that you are letting out the property.

Once you've decided to go down the buy-to-let route, have a think about the best type of property and location having thought about the sort of tenant you will be targeting (eg student, young professional or family). Spend some time selecting the most appropriate mortgage and make sure you carry out a survey on the property. If you're buying a property which is already rented out to a tenant, check that all the relevant documents are in place and that the deposit will be transferred to you. Also remember that there will be more restrictions when it comes to leasehold as opposed to freehold property.

For further information on buy-to-let read What to consider when buying a property to rent out, Points to consider before you buy-to-let and Buy-to-let as an investment and Buy to let as an investment in Scotland.

Whether you try and find a tenant yourself or decide to use a letting agent, it's important to have some form of vetting procedure in place, even if this is simply a case of obtaining a reference from their previous landlord and current employer. You can additionally get a credit report which may give you an indication as to whether the prospective tenant will be able to pay rent on time. You'll also want to know if they're good at paying bills on time or if they've ever been evicted. However bear in mind that even 'good' tenants can become problematic as a result of changing circumstances. Also, remember that it's illegal for landlords to discriminate against tenants on the basis of gender, sexuality, race, disability, age or religion or belief. For further information read Picking a tenant and Picking a tenant in Scotland.

If you're considering renting a property to multiple tenants, note that there are legal requirements relating to the registration of houses in multiple occupation (also known as HMOs). A property which is let as a main or only home to at least three tenants who form more than one household and who share a kitchen, bathroom or toilet will count as an HMO.

If your HMO is occupied by five or more persons who form more than one household it must have a licence. There are fines for non-compliance so make sure you check with your local authority for their policies on HMOs. For further information read HMOs.

An Inventory can be used to record and agree the condition of items in a rented property. If there are any disputes at the end of a tenancy, the inventory can provide useful evidence. However it’s important to also include any particular obligations of both tenant and landlord in the tenancy agreement. Tenants should keep the property clean and in a good state of repair inside, whilst landlords are normally responsible for exterior maintenance and general safety.

Landlords owe a duty of care to any tenants and must comply with a range of safety obligations. Gas safety checks must be undertaken every twelve months by a Gas Safe registered engineer; safety certificates should be kept and copies provided to tenants. Electrical equipment must be safe, undamaged and carry the British Safety Standard sign. There should be at least one smoke alarm on each floor of the property and any furnishings provided (including sofas, beds and futons) must meet fire resistance standards. For further information read Legal obligations of a landlord and and Legal obligations of a landlord in Scotland.

Energy Performance Certificates (EPCs) contain information about the energy efficiency of a property, using ratings of A-G. They are valid for ten years. All prospective tenants must be provided with a valid EPC free of charge before they sign the tenancy agreement. Fines can be levied upon landlords who fail to provide EPCs.

Gas safety certificates must be given to the tenants as well. Not providing an EPC or a gas safety certificate can cause complications if you try and evict your tenants or want to reclaim possession of the property. For further information read Energy performance certificates.

It's a good idea to take a deposit at the beginning of the tenancy to cover the costs of repairing any damage to the property. If you use an assured shorthold (AST) tenancy agreement you must comply with the tenancy deposit protection scheme. For further information read Deposit protection schemes. The scheme aims to protect the deposit and makes use of an Alternative Dispute Resolution (ADR) service in case the deposit is disputed at the end of the tenancy. In England and Wales you can choose from an insurance or custodial deposit scheme and must provide your tenant with prescribed information about the scheme within 30 days from receiving the deposit. Failing to do so can render you liable for a fine up to three times the amount of the deposit and cause problems with obtaining possession of the property from the tenant. For further information read Rent deposits and utilities.

There are a wide range of different lettings documents so you'll need to ensure you choose the right one for your particular situation. Having an appropriate agreement in place will secure the rights and set out the obligations of both landlord and tenant.

An assured shorthold tenancy (AST) - either for a flat or a house - is the most common type of agreement in England and Wales and gives the tenant the exclusive right to use and occupy a house or flat for a certain period of time. If you just want to rent out a spare room in your home, a Lodger agreement can be used. Meanwhile a Room rental agreement is a type of AST used by landlords who wish to rent out several rooms to multiple occupants. Finally a Holiday letting agreement provides a holidaymaker with full use of a property for a short period of time (up to a maximum of three months).

Ask a lawyer for a property that is outside England and Wales.

There is now legislation in place that bans landlords and agents from charging tenants, and prospective tenants, certain fees. The new legislation is designed to restrict the kinds of payments that landlords and letting agents can charge to tenants in connection with the letting of a property. Think of things like credit checks, reference checks, cleaning services, inventory checks, admin fees or check-out fees. In addition, the law sets out strict regulations for the treatment of holding deposits and cleaning costs. Certain fees are still permitted (for example, utilities and council tax and a refundable holding deposit to reserve the property (capped at one week’s rent)).