If you have an unoccupied property and are considering preparing it for the rental market then you have several important decisions to make. Letting an unoccupied property will mean cheaper insurance as you will then need a landlords insurance policy to cover your property as soon as the tenants move in.
Too many ‘would be’ landlords make one big mistake. They don’t prepare their property for letting.
If you have a house to sell, most people would ensure that it was presentable. The preparation work should include – giving it a lick of paint, maybe renewing old carpets, re-hanging ill fitting kitchen cupboard doors, making sure the property was presented in neutral colours etc. Make sure the whole place is spotlessly clean and smelling nice. A few pots of air freshening granules does wonders for a property that is shut up most of the time.
Outside should be completely clear. Get rid of the old mattress behind the garden shed, whilst you are there – totally clear out the shed, mow the lawn, cut back the overhanging tree, dig the weeds out of the flower beds! It needs to be completely clear of rubbish and evidence of previous occupation.
Regardless of whether the viewer is looking at the property for the purpose of buying or renting the property, nobody wants to see a grotty, unclean property. Spend some time and money cleaning it up and it will pay dividends.
What is your target market ?
The property needs to be ‘dressed’ and prepared for the type of tenant that is your target market. If your property is in a typically less well off area with low disposable income or with many unemployed you may find that a property that is furnished or part furnished is what is needed as maybe the residents of that area will be less likely to have their own.
If you are in an area typically frequented by students and they are your target letting market then you need to consider furnishing it specifically for them. Student let property will typically be cheaply furnished but you will need to include everything to enable them to live from day 1. Items such as cutlery, crockery, washing machine, bedside cabinets, bottle openers to wine and beer glasses need to be provided for students – a turnkey house. The yield is usually greater but you need to off set this against the need to redecorate, and renew carpets usually every year, and buy new furniture more frequently. Many costs including insurance are higher with students (LINK TO BICKERS INSURANCE) although the potential rental income is much higher.
If your property is in an idyllic location and suitable for holiday lets you could consider handing the property over to a holiday letting company. In addition to running all of the lettings throughout the year the company could handle all of your cleaning and maintenance – so there is little or nothing to do other than to collect the rent and make sure you have suitable let holiday home insurance (LINK TO BICKERS INSURANCE)
The usual rental is to professional / working people on a 6 or 12 month Assured Shorthold Tenancy Agreement. Or you could rent the property to a large company who will use it for their staff whenever they visit the region, or if workers abroad visit.
Rent a Room
If you have an empty / unoccupied room in your home then you can earn tax free income from it. The Rent a Room Scheme allows you to earn up to a threshold of £4,250 per year tax-free from letting out a spare room (or entire floor) as long as it is furnished. This is halved if you share the income with your partner or someone else.
The tax exemption is automatic if you earn less than the threshold so you don’t need to do anything unless you earn more than the threshold in which case you need to declare it to HMRC.
You can opt in to the scheme at any time if you are a resident landlord, whether or not you own your own home, or if you run a guest house or a B&B. You cant use this scheme for homes converted into flats.