Renting out a second home can be a great way to generate extra income, but it’s not without its challenges. From finding the right tenants to understanding your legal obligations and tax implications, there’s a lot that goes into being a landlord.
At 53 Degrees Property, we understand that you have questions about how to safely rent out your second home and make sure it is profitable for you in the long run. That’s why our experts have put together this guide for anyone looking for guidance on letting their second home successfully.
In this post, we’ll explore the process of renting out a second home, step-by-step. We’ll also answer some common questions on how to manage your rental property, from insurance to security deposits. Let’s get started!
1. Analyse the Local Rental Market
Before you look into renting out your second home, it’s important to understand the local rental market and get an idea of what kind of rental rate you should expect. Research the going rates for similar properties in your area and factor in any additional expenses like insurance and property taxes. This will give you a better understanding of the potential profits from renting out your home.
You’ll likely be able to get a better rental rate if your home is located in a desirable neighbourhood. When buying a second home to let out, it’s worth bearing this in mind.
You will also have more success if the property is newly redecorated and has updated appliances and features. If you’re planning to let it out as a holiday home through a property management company, they may offer to take care of some of the renovations for you.
2. Set Up Your Property for Renting
Next, you’ll need to get your second home ready for tenants. This is slightly different from preparing a property to live in yourself. You’ll have to familiarise yourself with safety regulations, have your gas and electric appliances assessed and take care of any necessary repairs.
As a landlord, you have certain legal responsibilities when it comes to your rental properties. For example, if the accommodation is furnished, you must make sure that all of the furniture meets fire safety standards.
You must be ready to respond 24/7 should your tenants need to report an emergency. If this doesn’t sound appealing or practical, a good solution is to use a guaranteed rent company such as 53 Degrees Property. That way, the company will be responsible for liaising with tenants and resolving problems on your behalf.
3. Put Your Property on the Market
Once you know what type of income you can expect, it’s time to create an online presence for your rental property. Consider setting up a website or listing your property on real estate sites like Zillow or Trulia. Make sure to include professional photos and detailed descriptions that highlight the features of your home so potential tenants can easily see what they’re getting into.
You can save yourself the time, money and effort by enlisting the help of an experienced property management company like 53 Degrees Property. We have the knowledge and resources to advertise and market your second home and manage it on your behalf.
4. Screen Potential Tenants
Once you’ve set up a successful online presence, you can start looking for tenants. Before signing any contracts, it is important to screen potential tenants carefully by conducting background checks, verifying their references and reviewing their credit score. This will ensure that only qualified tenants who can pay the rent in full and on time move into your property.
If you’ve enlisted the help of a property management company, they’ll find and vet tenants on your behalf. This will give you some peace of mind, and help you avoid the stress and effort of doing it yourself.
Additionally, if you opt for a guaranteed rent agreement, you won’t have to worry about void periods or tenants not paying rent. You’ll receive a guaranteed monthly income regardless of how much the property is generating.
5. Prepare the Tenancy Agreement
Before letting a tenant move into your second home, you’ll need to have a contract written up and ready to go. The tenancy agreement should be legally binding, and should set out expectations regarding the deposit, rent payments, maintenance responsibilities and so on. It should also explain what will happen if you or the tenant wishes to break the contract early.
We’d advise seeking the services of a solicitor, letting agent or property management company to help you with this. They can help ensure that nothing is missed and that there are no legal loopholes that someone could take advantage of.
What Are the Rules Around Tenant Deposits?
A deposit is an amount of money held by the landlord or agent as security against damage to the rented property or unpaid rent. The maximum deposit that can be taken is usually equivalent to 5 weeks’ rent, although this can vary depending on your region and may be less in some cases.
According to UK law, all tenant deposits must be held securely in a deposit protection scheme for the duration of the rental agreement. Landlords must provide tenants with written information about how their deposit is being held and which scheme it’s protected under.
This can be complicated to organise, but if you’re using a property management company or letting agency, they’ll arrange it all on your behalf. Alternatively, you can go the route of short-term lets that don’t require a deposit.
What Insurance Do I Need When Letting Out a Second Home?
When renting out your second home, you should consider taking out some form of landlord insurance. While it’s not legally mandatory, this will provide cover for a range of risks.
Most landlord insurance packages include policies such as buildings insurance, contents insurance and property owners’ liability insurance. Ensure that you’re protected for damage to the property and its contents, liability claims from tenants, legal expenses and loss of rental income. It’s worth comparing quotes and cover from a few different insurance providers before committing.
What Are the Benefits of Using a Property Management Company?
Rather than dealing with everything yourself, you can save time, money and stress by going through a management company. At 53 Degrees Property, we can help with every aspect of renting out a second home, from marketing it to vetting and liaising with tenants.
You’ll benefit from knowing that your second home is in good hands and that it’s being managed efficiently and efficiently. We’ll be your tenants’ point of contact throughout, organising maintenance and responding to all complaints.
To find out how 53 Degrees Property can help you let out your second home, contact us today. Our helpful team will get back to you as soon as possible.
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