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Options for letting a property: ways to let, rent agreements and management
Options for letting a property: ways to let, rent agreements and management
There are many decisions you need to make as a landlord, from choosing a type of property to rent to making letting agreements. This page will provide guidance on the different options you have when letting a property, including ways to let, letting and rent agreements, and using letting agents.
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Information on choosing a property to let, and the different ways to let a property.
This section provides guidance on assured shorthold tenancy vs assured tenancy, and short term lets vs long term lets.
The benefits and risks of inclusive and non-inclusive rent agreements.
The advantages and disadvantages of using a letting agent, including guidance on choosing the best option for you.
Ways to let a property
When choosing a buy to let property, you should research your chosen area and find a property that is close to necessities and is also in an attractive location. Consider your budget and the kind of tenants you are expecting to live in your property. You should also check the condition of the property first, so you have an idea of how much maintenance it requires.
Read how to prepare your home to let here.
Getting a buy to let mortgage
Buy-to-let mortgage fees and interest rates are also usually higher than ordinary mortgages. Most buy-to-let mortgages are interest-only, meaning you pay the interest each month. You will then pay the interest on the loan as it accrues every month, generally from the proceeds of the rent they collect. The full amount of the mortgage is paid at the end of an agreed term
Letting a holiday property
Short-term holiday lets can be an attractive option if you own a property in a location that is popular with tourists. Holiday property letting can be very profitable, as you can charge much higher rents when a property is in an attractive location.
In most cases, planning permission is not required to let out a property for holiday use. However, if you turn your property into a B&B, planning permission must be sought.
Find out how to let a holiday property here.
Letting a student property
Demand and competition in student areas are consistent, making student letting a potentially good investment. You will likely be letting to sharing occupants who are not in the same family group, so you will need to comply with rules around Houses in Multiple Occupations (HMOs).
Student lets can be marketed in the same way as traditional lets.
Find out how to let a student property here.
Types of letting agreements
Assured shorthold tenancy vs assured tenancy
Assured shorthold tenancy
Assured shorthold tenancy (AST) is the most common type of agreement used by landlords letting to tenants. Tenants are typically given a period of six months to stay in the rented property; however, this can be for longer. After this initial agreed period, the landlord is able to evict the tenant without a legal reason.
This option can be beneficial, as it means you can ask a tenant to leave more quickly than in an assured tenancy if they cause damage to the property.
Assured tenancy
An assured tenancy, in contrast, provides tenants with far greater security of tenure in the long-term. Tenants are able to stay in a property until they choose to leave or the landlord gains possession on one of the grounds listed in the Housing Act 1988.
Short term letting vs long term letting
A short term let
A short term let often starts from one day and can last up to a few weeks or months. You have this option for any type of property. A short term let can result in high return over a short period of time, and can lower the risk of your property becoming damaged. However, this can cause less stability and be more costly for landlords, as you need to get the property back to standard in-between short-term tenants when the fixed term ends. This option can also increase the risk of unstable rental income.
A long term let
Long term lets often start from sixth months and can last for a few years. This means you won’t need to find tenants as often; however, your property may be more at risk of wear and tear through hanging pictures and other factors. Long term letting causes peace of mind that the property is occupied long-term, meaning cash flow is less likely to be interrupted. However, it can sometimes increase the chance of unpaid rent or tenants making late payments.
Read our full guide to how to let your property here.
Inclusive vs non-inclusive rent agreements
Inclusive
This can include rent, bills, council tax, wireless broadband, and TV license. All-inclusive bills are a high priority when choosing a place to live for millennials.
Why choose an inclusive rent agreement?
- They are popular with younger tenants looking for shared accommodation
- You can ensure that bills are paid on time
- Utility bill management services can take the hassle out of managing bills for your rental property
Risks of an inclusive rent agreement
- Managing bills can be time-consuming and a lot of responsibility
- Tenants may not be consistent with their uses of services
- You must continue to pay utility bills even if a renter faults on rent payments
An inclusive rent agreement can be a big commitment. However, services such as Split the Bills can help you to manage your bills, leaving you with more time to commit to other landlord duties. These services take responsibility for managing the bills and have pre-agreed deals with service providers for all the major bills, meaning you don’t have to look for the best deals yourself. Many bills splitting services like Split the Bills will also give you the option to refer your tenants directly to tenants, and you can earn a commission for doing so.
You can read more about how Split the Bills can help here.
Non-inclusive
A non-inclusive rent agreement means you have fewer responsibilities, as the tenants have to sort out their own bills.
Why choose a non-inclusive rent agreement?
- Less work for the landlord in calculating and adding bill costs to rent
- Saves time in managing a number of bills
Risks of a non-inclusive rent agreement
- Less likely to attract younger tenants, such as students
- Unpaid bills can lead to cut off services and fall on the landlord to sort out
You can read our full guide to inclusive vs non-inclusive rent agreements here.
Should you use a letting agent?
A letting management company can take responsibilities off your hands. They are ideal if you don’t have enough time to take on all the responsibilities, and are popular amongst landlords with full-time jobs.
All letting agents should do the following:
- Provide tenancy agreement guidance
- Assists you in finding a suitable tenant
- Explain landlord responsibilities
- Provide answers to any tenancy-based queries
You can choose how much responsibility a letting management agent has. You have the options of a prospective tenant-find service, a tenant-find and rent collection service or full management. This generally depends on how much time you have on your hands, and how much you are willing to pay a letting agency.
You can read more about using letting agents in our guide to the benefits of using a letting agent.
Letting your property privately
Private letting means you have to find a potential tenant independently, chase unpaid bills and take control of health and safety requirements. Letting a property privately is a cheaper option than paying a letting agent, and can be ideal if you are worried about potentially complicated terms and conditions. However, being a private landlord can be a time-consuming job in comparison to using a letting agent.
Related content
- Landlord responsibilities: utility bills, council tax, maintenance and more
- How to let your property
- Should landlords use letting agents? Benefits, fees and responsibilities
