Becoming a landlord involves a lot more than just answering calls and cashing rent cheques. You’ve got to have a decent understanding of property, communication and the legal necessities behind letting home or a flat.

Renting a home without the right preparation could result in damage to the property or trouble with the law.

Don’t worry. It’s not difficult to learn the ropes of being a good landlord (and to start making a steady passive income). Below, we’ll cover the legal necessities that landlords need to know. And, we’ll include some insider tips from real landlords on how they bring in steady rent cheques with little hassle.

5 Tips for New Landlords

1. Get Legal Before You Let

There are a few legal requirements that your property must meet before you rent it to tenants. Most of these are related to health and safety, such as fire, electrical and gas-related hazards.

Before listing your property, get a full inspection by local contractors.

Even unseen hazards can result in fines. For example, small issues like uneven stairs or a pantry prone to mould could turn into costly violations.

If a tenant is hurt, it could result in serious legal action against you.

Old properties will require more renovating, but newer properties can have issues that go unnoticed until it’s too late. It’s a good idea to inspect everything beforehand—even if certain parts of the property appear to function well. A thorough check will leave you with nothing to worry about.

You may also need to get a license to rent a property, depending on the type of tenancy you choose. Some communities require landlords renting houses of multiple occupancy (HMOs, or flatshares) to acquire an HMO license. Check with your local council for fees related to the license and other HMO advice.

2. Make Your Rental Comfortable (and Profitable)

It’s tempting to list your property straight away and start making money. But a bit of patience and investment may yield bigger rewards in the end. Consider renovating your property before letting it, or at least updating it with new furniture and appliances.

Nicer, better-equipped properties go for a higher price. Your property as-is may fetch £800 a month. But if you were to spend £6000 renovating the kitchen, you may be able to ask £1000 instead. That’s an extra £2400 per year.

Higher rent prices also attract more well-to-do tenants who have steady jobs and are likely to stick around for longer. This means less work for you and, probably, better-behaved tenants.

Continue making an effort to keep your property comfortable even when tenants are living there. You should replace appliances every five years and keep an eye on wear and tear. Even small updates like replacing a sofa will give tenants an incentive to stay.

3. Check Tenants’ History before Renting

All landlords have trust issues and for good reason. Many novice landlords rent to tenants based on their gut feeling. If someone seems smart and reliable, then they will probably be a good tenant, right?

That couldn’t be further from the truth. Tenants who seem tidy can be slobs. And tenants who dress poorly may be very good with money (and pay rent on time!).

The best way to know what a tenant will be like is to do your due diligence on them before signing an agreement. This includes doing a credit check, a background check and an interview as well as asking for references from previous landlords.

If you’re renting to young people, they may not have references from landlords. You can ask for personal or professional references instead.

This process may take a bit of extra work on your part, but it will result in more responsible and respectful tenants—which is the most valuable thing for a landlord. It will also deter unsavoury and non-serious applicants.

4. Choose Tenants Who Get on Well

One of the most important (yet unexpected) tasks of a landlord is managing the relationships of tenants. This applies mostly to student housing and HMOs. When renting a flatshare, you’ve got to consider the ages and personalities of your potential tenants. If they have little in common or don’t get on, it will result in higher turnover and a lot more work for you.

The easiest way to manage this is to rent to a single type of tenant or tenants from the same age group. For example, young professionals who need to take the train to work every morning may want to live with others who go to bed early. Students with irregular hours and active social lives will get on better with other students.

In case of conflict, make yourself available to tenants and provide resources for mediation.

5. Get Landlord Insurance

If you’re planning to let your property for longer than 2 years, insurance is a must.

Even with the best tenants, rental properties undergo a lot more wear and tear than other homes (especially HMOs). Renovations and upkeep need to happen more often, and damage is more likely to occur.

As a landlord, you will be responsible for paying for nearly all of the damage, as much of it will be deemed accidental or normal depreciation of the property (unless it was due to outright negligence or aggressive behaviour by a tenant). Landlord’s insurance will protect you from many of these costs.

Most landlords highly recommend getting insurance because damage to your property is nearly inevitable in the long run. Insurance also covers fire, theft, accidents and legal fees if you’re sued by a tenant.

Top Tip For New Landlords: Be Kind and Learn as You Go

Being a landlord is all about people skills. It’s hard to anticipate what will happen when you deal with different personalities and different tenant needs. The best you can do is be kind to your tenants and those who keep your property looking great (such as local contractors). That’s how you build long-term relationships and a steady income.