Becoming a landlord can seem like a minefield for the first time investor. Thankfully the process is relatively straightforward if you follow the steps in this easy guide:
Talk to your Lender/Mortgage Advisor
Landlords must ensure that their mortgage is suitable for renting. Residential mortgages do not permit letting out properties so if you have an existing residential mortgage on the property, you must either change this to a buy-to-let mortgage or talk to your lender about obtaining a 'consent to let' authorisation. If you have any questions regarding this process please contact us and we can advise, or put you in touch with one of our trusted mortgage advisors.
Choose a Letting Agent
There are many agents to choose from - just type 'lettings agent Edinburgh' into Google and there will be pages of options to choose from. But this can be daunting. We recommend checking out agents' Google ratings as a good reference as to how they are performing. If you are investing from abroad, or elsewhere in the UK, agents will be happy to discus their service over the phone or Zoom/Teams in order to give you a much better feel of who you will be working with. We proudly recommend Umega lettings as we believe them to be the best in the market for experience, service and, importantly, achieving top of the market rental returns. It's no accident that they have won Scottish Lettings Agent of the Year for the past 3 years running.
Furnished/Unfurnished
Good agents will advise to rent out properties on a fully furnished basis for 1 or 2 bedroom flats. This only requires items such as furniture and kitchen essentials.
Marketing a property as furnished ensures that your property achieves the highest level of interest from potential tenants.
If your property has 3 or more bedrooms it may be more beneficial to rent out on an unfurnished basis due to these properties attracting families and more established renters who may have accumulated furniture themselves. The exception here would be renting to students who will require all the essentials.
Managed or Self-Manage?
Most overseas/absentee landlords choose to let their properties on a fully managed basis. This will include marketing your property, vetting potential tenants, preparing contracts, collecting rent and all 'on the ground' contact with your new tenant. This service also includes an on-hand solution should a repair be necessary or a problem occur which needs dealt with. Fees for this service are usually 10% plus VAT.
Landlord Registration.
By law, every landlord in Scotland must register with the local council as a landlord. This can take up to 1-2 weeks so it is important to apply for this in advance of letting to avoid delays. Registration with Edinburgh Council can be completed using this link, and using your chosen lettings agent as the agent on the form.
Deposit
Landlords should always insist a deposit is paid prior to occupation. Usually this equates to between 1 month to 6 weeks equivalent rent. The amount is up to the Landlord and will be stated in the lease (written by the letting agent). It is fully refundable at the end of the tenancy minus costs for any reasonable damages incurred during tenancy. Details of the parameters for these costs will be set out in the lease.
The Tenancy deposit Scheme which came into place in 2011 states that all tenant deposits must be transferred into a Government approved tenancy deposit scheme. Your tenant will transfer you their deposit when they first sign their lease and it is Landlords/agents responsibility to transfer that balance into an accredited approved deposit scheme. We recommend Safedepositsscotland and Mydepositsscotland, but your letting agent should organise this all for you if you choose to have your property managed.
Inventory
It is imperative to undertake a full Inventory both at time of rental and end of tenancy to ensure that any damages/issues that may arise are legally enforceable in line with the tenancy deposit scheme. Your lettings agent can do this for you on request at a charge of around £95 plus VAT.
Certifications for Letting.
The lettings industry is well regulated to protect both tenants and landlords. The following link lists the certifications that are required by law, and can be arranged by your letting agent on request
https://www.propertybeeinvestments.com/post/certifications-required-by-law-for-letting Landlord insurance
Landlords should have specialist landlord insurance for their properties. Often this is offered in conjunction with buildings insurance and coupled with contents insurance. If you require any more information or our Insurer recommendations please contact us.
Additional Tips:
Prepare a Folder of Instructions
To avoid late night calls about how to work the oven (!) it's useful to gather all appliance instruction manuals in a folder as an ease of access guide for tenants
Arrange a Professional Clean of your Property
You would be expected to have your property professionally cleaned before a tenant moves in, and similarly your tenants must do the same when leaving the property. This will be detailed in the lease if you use a letting agent.
If you have any further questions on anything to do with letting your property we are here to help.
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