10 Tips for the First-time Landlord
If you’re a first-time landlord in the rental business, there are lots of things to learn to maximise the profits of your new business venture. Take a few minutes to check out our 10 tips for first-time landlords.
Make wise renovations
When making renovations, you need to concentrate on improvements that will either increase the property value or boost your rental yield. For rental properties specifically, focus on durability and low-maintenance features rather than luxury finishes. Tenants prioritise practical, modern amenities over decorative touches like ornate cornicing or expensive light fixtures.
The best value-adding renovations include double glazing, modern kitchens and bathrooms, energy-efficient boilers, and improved insulation. These not only increase property value but also reduce tenant energy bills, making your property more attractive. Consider that energy efficiency improvements are increasingly important as the minimum EPC rating is ‘E’, and this may rise in future. Durable flooring like laminate or vinyl is better than carpet in high-traffic areas, and neutral decoration appeals to the widest tenant pool.
Be careful not to over-renovate for your local market. Research comparable rental properties in your area to understand what tenants expect at your price point. Remember that your return on investment comes from rental income, so renovations should either increase the rent you can charge or reduce maintenance costs over time.
Get the best deals
Your main expense will be your mortgage, and it’s crucial to understand that buy-to-let mortgages differ from residential mortgages. You’ll typically need a larger deposit (usually 25% or more) and lenders will assess whether the rental income covers 125-145% of your mortgage payment. Shop around on mortgage comparison websites and speak to a mortgage broker who specialises in buy-to-let properties to get the best deals.
Consider whether a fixed-rate or tracker mortgage suits your circumstances. Fixed rates provide certainty for budgeting, whilst tracker rates may offer lower initial costs but carry more risk if interest rates rise. Look for mortgages with portability options if you plan to expand your property portfolio, as this allows you to transfer your mortgage to another property without penalty.
Make sure you can change the terms of the mortgage without incurring exorbitant costs, and check for any early repayment charges. Also, consider whether holding the property in your personal name or through a limited company structure makes more financial sense, particularly if you’re a higher-rate taxpayer. This decision has significant tax implications, so consult with an accountant before proceeding.
Get insurance that guarantees rent
The main concern that landlords have is that tenants won’t or can’t pay their rent. There’s always a risk that your tenant may lose their job or face financial difficulties. Landlord insurance is essential and comes in several forms that you should understand.
Buildings insurance is mandatory if you have a mortgage and covers the structure of your property against damage from fire, flooding, and other disasters. Contents insurance is necessary if you’re letting your property furnished, covering furniture, appliances, and fixtures. These are different from standard home insurance policies, which don’t cover rental properties.
Rent guarantee insurance is a separate product that covers lost rental income if your tenant can’t pay, typically for 6-12 months. There are also comprehensive landlord insurance policies that bundle buildings, contents, rent guarantee, and legal expenses cover together. Legal expenses insurance is particularly valuable as it covers the costs of eviction proceedings, disputes with tenants, and legal advice.
If you are insured comprehensively, you can sleep easy knowing every eventuality is covered. Compare policies carefully as coverage levels and excess payments vary significantly between providers.
Get your certificates
Before you can legally rent your property, you must comply with numerous safety regulations and obtain the necessary certificates. Failure to do so can result in substantial fines, prosecution, and invalidate your insurance.
You need an annual gas safety certificate from a Gas Safe registered engineer, covering your boiler and any gas appliances. An Electrical Installation Condition Report (EICR) must be carried out by a qualified electrician at least every five years, or at the start of a new tenancy if more than five years have passed. All electrical appliances you provide must be safe and portable appliances should be PAT tested.
You must install working smoke alarms on every floor of the property and carbon monoxide alarms in any room with a solid fuel burning appliance. Test these at the start of each tenancy. An Energy Performance Certificate (EPC) is required, and your property must achieve at least an ‘E’ rating to be legally rentable, with limited exceptions.
You’re also required to conduct a legionella risk assessment for the water system. Additionally, you must provide tenants with a copy of the government’s “How to Rent” guide at the start of the tenancy. If your property is a House in Multiple Occupation (HMO) with three or more tenants forming two or more households, you’ll need an HMO licence. Some local authorities also operate selective licensing schemes, requiring additional licences even for single-household lets, so check with your local council.
Screen your tenants
Your tenants are your only source of income, so thorough screening is essential to protect your investment. You need to verify that potential tenants can afford the rent, have a good payment history, and are legally entitled to rent in the UK.
Right to Rent checks are a legal requirement. You must see original documents proving your tenant’s immigration status and right to remain in the UK, and keep copies of these documents. Failure to conduct these checks can result in significant fines. Use a service such as OpenRent that will verify these documents for you.
Credit checks reveal any County Court Judgements, bankruptcies, or poor credit history that might indicate payment problems. Employment references confirm income and job stability, whilst previous landlord references show their track record as tenants. As a general rule, the monthly rent shouldn’t exceed 30-40% of the tenant’s gross monthly income to ensure affordability.
Be aware that discrimination laws apply throughout the tenant selection process. You cannot refuse a tenant based on protected characteristics such as race, religion, disability, sexual orientation, or gender. For students or those with limited credit history, requesting a UK-based guarantor provides additional security. The guarantor should also be reference checked and credit checked.
Make rent payments easier
Efficient rent collection is crucial for maintaining steady cash flow and good tenant relationships. Collect rent by standing order or direct debit electronically rather than accepting cash or cheques, as electronic payments provide a clear paper trail for your records and tax purposes.
Arrange for your rental payments to be collected in good time before your mortgage payment is due, ideally with at least a week’s buffer to account for any banking delays. Set the rent due date strategically, typically just after when most people receive their salary (around the 1st or 28th of the month), making it easier for tenants to budget and reducing late payments.
Consider using dedicated rent collection platforms that automate payment tracking, send reminders, and provide both you and your tenant with clear records. Your tenancy agreement should clearly specify the payment amount, due date, payment method, and consequences of late payment. If a payment is late, contact your tenant promptly but professionally. Many late payments are due to simple oversights rather than financial difficulties, and a friendly reminder is often all that’s needed.
Establish a pet policy
The UK government’s Model Tenancy Agreement now defaults to allowing pets, and landlords are encouraged to consider pet-friendly policies. Blanket “no pets” policies significantly limit your potential tenant pool, as approximately 50% of UK households own pets.
Rather than refusing pets entirely, consider establishing clear conditions for pet ownership. Request pet references from previous landlords to verify that the animal has lived in rental accommodation without causing damage. You might also require professional carpet cleaning at the end of the tenancy or stipulate that any pet damage beyond normal wear and tear will be charged to the tenant.
If you’re allowing pets, make sure your property is unfurnished or furnished with durable materials. Explain clearly in writing what responsibilities the tenant has, such as flea treatments, garden maintenance for dogs, and immediate reporting of any damage. You can request a higher deposit (within the legal limits of five weeks’ rent for annual rent under £50,000, or six weeks’ rent above that) or require pet damage insurance.
Remember that you cannot refuse assistance animals such as guide dogs for disabled tenants, regardless of your pet policy. By being flexible with pets whilst setting clear boundaries, you can access a larger tenant market whilst protecting your property through appropriate conditions and insurance.
Check on your property
Regular property inspections are important for protecting your investment, but you must balance this with your tenant’s right to quiet enjoyment of their home. You are legally required to give at least 24 hours’ written notice before visiting, and visits should be at reasonable times of day.
As a first-time landlord, it’s natural to be nervous about your investment, but you shouldn’t be checking on your property too frequently. Standard practice is to conduct routine inspections every three to six months. Excessive inspections can constitute harassment and damage your relationship with tenants.
At the start of the tenancy, make sure your tenants know where everything is, such as the water, gas, and electricity meters, fuse box, and stopcock. Explain how the boiler works, provide instruction manuals for all appliances, and agree on who is maintaining the garden. Conduct a thorough inventory check with photographs at move-in, as this protects both you and your tenant when it’s time to assess any damage.
Schedule seasonal maintenance checks, such as inspecting the property after winter to ensure pipes and roof tiles haven’t been damaged by cold snaps or storms. The annual gas safety certificate inspection provides another opportunity to check the interior condition. If you have long-staying tenants, offer to replace worn carpets and repaint periodically. This necessary upkeep maintains the property’s value and encourages tenants to stay longer, reducing costly void periods.
If you lack time for property management, consider using a letting agent who will handle inspections, maintenance coordination, and tenant communications for a fee, typically 10-15% of monthly rent.
Build a rapport with your tenants
Building a positive, professional relationship with your tenants is one of the most valuable things you can do as a landlord. Good tenant relationships reduce disputes, encourage longer tenancies, and make communication about issues much easier. Long-term tenants are incredibly valuable, saving you the costs of void periods, marketing, referencing, and property preparation between tenancies.
Be approachable and responsive to maintenance requests. You have a legal obligation to maintain the property in good repair, and dealing promptly with even small issues prevents them from becoming major problems. Let your tenants know that you’ll address maintenance concerns quickly, whether it’s a small leak or a broken appliance. Quick responses build trust and show you care about the property and their comfort.
Establish clear communication channels and set professional boundaries whilst remaining friendly. Some landlords find that a quick welcome pack with local information, emergency contact numbers, and a bottle of wine creates a positive start to the tenancy. Small gestures like acknowledging long-term tenancies or being flexible when life circumstances change can significantly improve retention.
If your tenants are having financial difficulties, they’ll feel more comfortable communicating with you if you’ve built a good relationship. Early communication allows you to work out a payment plan together, perhaps accepting partial payments temporarily rather than immediately pursuing eviction. Usually, two months of rent arrears is the point where you need to consider formal action, but before then, maintaining dialogue often resolves the situation.
There’s no need to threaten eviction unless it’s obvious that the tenant cannot or will not pay. Most tenants want to pay their rent and maintain a good rental record, so treating temporary difficulties with understanding often results in the best outcome for everyone involved.
Keep organised records
As a first-time landlord, start as you mean to go on with meticulous record-keeping. Proper records are essential for tax compliance, protecting yourself in disputes, and understanding your property’s profitability. You must keep records for at least six years for tax purposes.
Keep all receipts and records for every expense related to your rental property, including mortgage interest payments, insurance premiums, repairs, maintenance, safety certificates, letting agent fees, and tradesmen services. Many of these expenses are allowable deductions against your rental income for tax purposes, but you must have proof.
Understanding the tax implications is crucial. Since April 2020, you can no longer deduct mortgage interest from your rental income to reduce your tax bill. Instead, you receive a 20% tax credit on your mortgage interest payments. The old wear and tear allowance has been replaced with the replacement of domestic items relief, which allows you to deduct the cost of replacing furnishings, appliances, and kitchenware.
You must register for Self Assessment with HMRC and submit a tax return annually if your rental income exceeds £1,000 per year, or even if it doesn’t but you want to claim allowable expenses. The deadline for online submission is 31 January following the end of the tax year. If you’re employed, you’ll pay income tax on your rental profits at your marginal rate, and you may also need to pay Class 2 National Insurance contributions if your profits exceed certain thresholds.
Beyond tax records, maintain copies of all tenancy agreements, deposit protection certificates, safety certificates (gas, electrical, EPC), inventory reports, and all correspondence with tenants. Use property management software or detailed spreadsheets to track rental income, expenses, and important dates like certificate renewal deadlines and tenancy end dates.
Consider consulting an accountant who specialises in property investment, particularly in your first year. They can advise on whether holding properties through a limited company structure would be tax-efficient for your circumstances, explain capital gains tax implications when you eventually sell, and ensure you’re claiming all allowable expenses. The cost of professional accounting advice is itself a tax-deductible expense.
By keeping organised, comprehensive records from day one, you’ll make tax returns straightforward, be prepared for any disputes, and have clear data to evaluate whether your property investment is meeting your financial goals.
FAQs
What should first-time landlords focus on before renting out a property?
Start by understanding your legal obligations: safety certificates, deposit protection, right-to-rent checks, and a compliant tenancy agreement. Assess rental demand, set a realistic rent, and plan for routine maintenance. Good preparation avoids costly mistakes later.
How can a new landlord manage tenants effectively from day one?
Communicate clearly, set expectations early, and respond promptly to issues. Keep written records of all interactions, conduct regular inspections, and maintain a professional tone. Building a good relationship improves rent payment reliability and reduces tenant turnover.
What tools help first-time landlords stay organised and profitable?
Use property-management software to track rent, expenses, repairs, and certificates. Set reminders for renewals and inspections, store documents digitally, and review finances monthly. Good organisation keeps you compliant, reduces stress, and boosts long-term profitability.
10 tips for the first-time landlord: Things to remember
Following these tips will keep you in good stead as a first-time landlord.
- Renovate wisely to add value.
- Get the best mortgage deal.
- Get extra cover on insurance.
- Make sure you have all the necessary certificates.
- Screen your tenants to make sure they can and will pay the rent.
- Set up electronic rent payments.
- Establish a pet policy.
- Inspect your property for damage.
- Build a rapport with your tenants so they don’t avoid you if there are issues.
- Keep records to analyse profit and to declare your taxable income.
