Accidental Landlords, are you one of these people? In today’s ever-changing housing market, more and more homeowners are finding themselves in a situation known as being an “accidental landlord.” This happens when people are unable to sell their homes quickly, often due mostly to market conditions, and decide to rent their property out instead. This trend has been on the rise since the 2008 recession, and it’s only becoming more common as people struggle to find buyers for problematic properties.

However, just because you’ve decided to rent out your home doesn’t automatically mean you’ll make money. The rent may not even cover your mortgage, council tax, utility bills etc and with that comes its own set of challenges. While many homeowners only see the benefits of renting, it’s important to also understand the potential pitfalls.

Why do people rent instead of buying?

Renting is a great solution for many people, but it’s not the right choice for everyone. Here are a few common reasons people choose to rent:

1. Financial struggles: in the UK, it takes an average of eight years to save up for a house deposit. Not everyone can afford this, and renting can be the more affordable option.
2. Job relocation: some people’s jobs require them to move frequently, either within the country or abroad. For these individuals, renting makes more sense than committing to a home purchase.
3. Maintenance-free living: renters enjoy the flexibility of paying for a place to live without having to worry about the upkeep. From general maintenance to more substantial repairs, the landlord usually takes care of these responsibilities.

With around 4.5 million families renting in the UK, there’s always a market for rental properties. So, if you’re thinking about renting out your home, you will likely find healthy demand.

What are the problems with renting out your property?

Renting can seem like a great way to earn extra income, but it’s not without its mishaps. Here are a few things to consider before you become an accidental landlord:

1. Finding a good tenant

One of the biggest hurdles is finding not just any tenant, but a reliable one – someone who pays their rent on time and takes care of the property. This isn’t always as easy as it sounds. While you can try renting it out on your own, most people opt to use a reputable letting agent to help with the process. This can cost anywhere from approximately £500+ for a basic “tenant find” service, to around 10% (+VAT) of your rent per month if you hire them to fully manage the property.

Even with a trusted agent, there’s no guarantee you’ll find a great tenant. Worst-case scenarios can include tenants who refuse to pay rent or even leave the property damaged. To avoid this, always carry out thorough credit checks and ask for references from the tenant’s employer or even a a previous landlord (the one before their current landlord who would be willing to divulge more of that tenant’s history if they were bad). This extra step can give you peace of mind in case things go wrong.

2. Legal responsibilities

Becoming a landlord means you need to understand the legal requirements and regulations involved being a landlord (the final responsibilty lies with you, even if you appoint a letting agent). From making sure you have the right tenancy agreement in place, to protecting your tenant’s deposit in a government-approved scheme (like TDS or MyDeposits), there’s a lot to keep track of.

You might want to consider joining a paid professional landlord association, like the National Residential Landlords Association, for access to free legal advice and support with any paperwork.

3. Time & effort: the landlord’s job Is 24/7

Managing a rental property can quickly become a full-time job – especially if you don’t live nearby. Even simple things, like a broken shower or lost keys, require immediate attention. If you’re not around, you’ll need a reliable list of local tradespeople who can respond to emergencies.

Alternatively, you could hire a managing agent to handle the day-to-day responsibilities. This will cost you 10-15% of your rent each month, but if you’re juggling a job and live far from your property, this might be the best option for you.

4. What happens when the tenant leaves?

Once your tenant decides to vacate, it’s important to have an inventory of the property’s condition- photographs are essential. This helps protect you if the property is left in a poor condition. With the inventory in place, you can deduct any necessary repair costs from the tenant’s rental damage deposit.

While most tenants will take care of your property, not all will. If there’s any damage or mess left behind, you’ll be in a stronger position to get compensation with a clear record of the property’s condition when they moved in and out.

In summary

Renting out your home might seem like a good option if you’re struggling to sell, or if you’ve bought a new property but can’t move out of your old one yet. It can bring in extra income and help you manage your financial situation while you wait for the market to improve.

However, it’s not without its challenges. If you’re thinking about renting, make sure to weigh the pros and cons carefully.

If you don’t want to deal with the hassle of being a landlord, you could always sell your property to a cash buyer. We at Quick Property Sale can offer an easy solution, often buying properties in as little as two weeks – this could be an ideal option if you need to sell quickly.