BECOMING A LANDLORD

Pre-Purchase

Before entering the market a prospective Landlord should prepare a fully defined brief which clearly states the purchase requirements. This should include the following:

Investment Criteria

• Define the reasons for making the investment. Determine if this is a long or short term investment and determine if you are looking for strong capital growth potential or high rental returns.
• Must the rental income at a minimum cover costs (mortgage, mgmt fees, insurance, council tax) or are you prepared to make a further contribution every month?

Budget Range

• How much are you prepared to spend taking into account all cost associated with the purchase (deposits, insurance, legal, estate agency fees and survey fees, Mortgage set up costs, stamp duty, renovation costs etc).

Type of Property

• New build, traditional tenement, townhouse, holiday home (town or country).

Size of Property

• Decide upon the number of bedrooms, garden and number of public rooms. This will have a direct impact on purchase price.

Location

• City centre or fringe, student or business districts, near government office or tourist districts etc?
• Locations with a history of capital growth or locations with strong rental demand. Edinburgh examples with a history of capital growth and good rental demand include: New Town, Stockbridge, Comely Bank, Cannonmills, West End, Haymarket, Bruntsfield, Marchmount, Morningside.
• Second tier, lower priced, locations include Gorgie, Dalry, Fountainbridge & Tollcross.

Condition of Premises

• Determine if you would prefer to buy a property in good overall interior & exterior condition requiring minimal works or would consider full interior refurbishment if cost of works factored into purchase price.

Furniture & Fit Out Budget

• Set a budget for the furnishing of a property to a level commensurate with your selected target occupier. In addition set a figure for minor works such as repainting, minor repairs and maintenance etc.

Target Occupiers

• Taking into account the investment criteria, preferred locations, budget and type of property, determine the preferred or target occupier. Categories include: undergraduate students, mature students, young professionals, corporate tenants, families, upmarket holiday lets, mainstream holiday lets etc.

Timing

• Taking into account advice from the Independent Financial Advisor and prevailing market conditions determine the most suitable time to purchase the property and take possession. For example if buying a property to lease to students try and ensure that the property hits the market in August or early September or if buying a property for a holiday let don’t take possession shortly after the Festival finishes.

Pre-Letting

Prior to letting the property, Landlords should use the following check list:

• Ensure that the property meets all regulatory requirements.
• Organise inspection to obtain Landlord Gas Certificate.
• Arrange for inspection of electrical fittings and appliances.
• Confirm that all fixtures and fittings meet fire safety standards.
• Check smoke detectors, fire extinguisher and blanket. Install if required.
• If the property is 3+ bedrooms and the occupiers will not be related, the property must have an HMO licence.
• Organise Gas Boiler protection if required.
• Install Co2 detector.
• Advise Lender of the intention to lease the premises. Confirm lender approval if required.
• Contact Insurance company and amend policy where relevant. Ensure Tenants undertake obligation to insure against damage to the premises.
• Contact Royal Mail and arrange for redirection of any post.
• Take meter readings and contact utility service providers to cancel services or change customer name.
• Contact the local council (re Council Tax) to notify of change in occupier.
• If required, furnish the property to a level in keeping with the target tenant profile.
• Prepare a thorough inventory of all fixtures and fittings.
• Register Private Landlord status with Council and pay relevant fee.

Understand Roles & Responsibilities of being a Landlord which include:

• allowing the tenant peaceful and quiet enjoyment of the property throughout the term created.
• repairs to the structure and exterior of the property, heating and hot water installations, basins, sinks, baths and other sanitary installations.
• the safety of gas and electrical appliances.
• the fire safety of furniture and furnishings provided under the tenancy
• ensuring that the property is fit for habitation.
• repairing and keeping in working order water heating equipment.
• the common areas in multi-occupancy dwellings.

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