Being an accidental landlord means you find yourself in the position of owning a property that you can let out – but because of unexpected circumstances, rather than because you set out to become a landlord.
And this article explains the main reasons for becoming an accidental landlord, what you’ll need to do about your mortgage, the tax implications and more. Read on to find out everything you need to know.
The Main Reasons Why People Become an Accidental Landlord
There are several main reasons why you might become an accidental landlord, which include:
- Being unable to sell your current home so you choose to rent it out when you buy a new one.
- Needing to relocate for your job for a period of time and deciding to rent your home out so you can live in it when you return
- Inheriting a property, you either can’t sell or you wish to keep ownership of for your children so you decide to rent it out
Accidental Landlords and Mortgages
If you’re about to become an accidental landlord and you currently have a mortgage on the property, it’s essential you speak to an expert mortgage adviser who can talk you through your options for your mortgage. This is because you’ll need to tell your current mortgage lender about your changing circumstances in order to get approval from them so you can rent out your property.
There are two different ways to go about renting your property:
- Obtaining ‘Consent to Let’: When your mortgage lender gives you Consent to Let, this allows you to rent out your property without needing to change your mortgage. You may find your lender is more likely to agree if you’re planning to rent out the property in the short term while you try to sell or. Or if you’re moving away for six months or a year then planning to move back.
- Switching to a Buy to Let mortgage: Your other option is to change your current mortgage to a Buy to Let mortgage.
Landlord Obligations
Regardless of whether you’re an accidental landlord or set out to become a landlord, you will have the same legal obligations you’ll need to adhere to. These include:
- You’ll be responsible for making sure the rental property is safe. For example, you’ll need to get a registered engineer to complete a gas safety check on each gas appliance. And you’ll also need to follow fire safety regulations
- You must by law check your tenants have a legal right to rent in this country.
- And you’ll need to obtain any relevant licences and permits
Landlords Insurance
Make sure you take out landlords’ insurance – a stand home insurance will not suffice as you need specific landlord insurance.
Deposits
Deposit – understand the rules on securing the deposit, the time scale and what documents need to be given to your tenant.
Understanding the Property Legislation
Legislation – there are over 170 pieces of legislation that apply to UK landlords, make sure you have taken advise and understand what you must put in place to become compliant.
Talk it through
It may seem there’s a lot to consider. But whenever it comes to making any major decisions, the key is to be fully informed. That way, you’ll be certain you’re making the right decision for you. Please feel to give Anne Marie Lettings & Property Management a call to answer all your questions.