For property owners who are going to become first-time landlords in Edinburgh, it can appear to be a daunting process with a number of hoops to jump through. Legal requirements for landlords have increased significantly over recent years however once these have been organised and understood, the process is more straightforward than first-time landlords might think.
Step 1: Understanding what is involved for first-time landlords in Edinburgh
During the research phase first-time landlords can read plenty of relevant material online (like this blog!) to get an understanding of what is involved. Most first-time landlords will engage the services of an Edinburgh letting agent to benefit from their local market knowledge, access the main advertising or marketing portals like Rightmove and make use of the security of their insurances, contractor networks, credit checking, referencing and arrears processes. Even with a letting agent taking on the legal work of letting a property, it is still important for first-time landlords to understand their responsibilities. We published a blog earlier this year on the legal requirements for first-time rental properties, most of which will be taken care of by the letting agent. Landlords should budget to spend their first month’s rent on legal certificates (safety checks), smoke detectors (if they do not have them installed already) and tenancy set-up fees.
Step 2: Choose a letting agent
There are a few things to consider when choosing an Edinburgh letting agency and this blog will help narrow down the choices.
Step 3: Tasks for the landlord
Once a letting agent has been appointed, they will deal with all the hands-on work involved with letting and managing the property. There are a couple of other minor but important tasks for first-time landlords to take care of;
- Registering as a landlord with the local authority. This is a straightforward form-filling exercise and can be done easily Once registered, the landlord will be issued with a registration number that must be used by the letting agent when advertising the property for let. The Edinburgh local authority will check that the first-time landlord is a “fit and proper person” before granting their registration number. The local authority keep a public record that the landlord and property are registered and who the managing agent is. This gives the local authority more control in the event of any issues at the property. Registering as a landlord for the first time costs £55 and registration must be renewed every 3 years.
- End of year tax-return. First-time landlords will have to complete a tax return at the end of the financial year declaring their rental income. The tax year ends on the 5th of April and the tax return must be completed and submitted by the end of the following January (10 months later). All that needs to go into the tax return is the rental profit made on the property over the course of the financial year. All agency fees, legal certificate costs and repairs are allowable expenses as are any mortgage interest payments depending on the landlord’s circumstances – by 2021, mortgage interest will be tax deductible but only at basic rate and this change is being phased in between now and then. That’s it!
There is less work involved in becoming a first-time landlord in Edinburgh than most prospective landlords think. You can start the ball-rolling now by carrying out a free, instant rental valuation of your property here.