# How to Be a Profitable Landlord After the Renters' Rights Act > Is property investment still worth it, and what does it really take to be a good landlord? In this episode of The Healthy House, we’re joined by a former litigation solicitor, property investor and former letting agency owner for an honest conversation about the realities of… *Source: https://www.thehealthyhousepodcast.co.uk/episodes/how-to-be-a-profitable-landlord-after-the-renters-rights-act* [![](https://www.thehealthyhousepodcast.co.uk/images/episodes/how-to-be-a-profitable-landlord-after-the-renters-rights-act.jpg?v=aa07a322c0) Play the video: How to Be a Profitable Landlord After the Renters' Rights Act](https://www.youtube.com/watch?v=_SRmFmjOMTA) This episode on - ![Listen on Spotify](https://www.thehealthyhousepodcast.co.uk/_astro/spotify.YwmeRW5F.png) - ![Watch on YouTube](https://www.thehealthyhousepodcast.co.uk/_astro/youtube-on-light.CKcZyr2K.svg) - Listen in any app ## The short version - A letting agent only does what the contract delegates, and the owner's own duties stay with the owner. Ramona Hirschi, a former litigation solicitor and letting agency owner, explains that under agency law the agent steps into the landlord's shoes for landlord obligations such as safety, finding and managing the tenant, repairs and rent, but not for being a property owner, such as refurbishing a vacant house. - Landlords who think hiring an agent makes a property hands-free tend to have a harder time. Ramona says the best landlords hire an agent for the professional work and focus on running the property as an investment: the mortgage and rate, and all the costs, including the agent, admin, void periods, insurance and finance. - Keep rents near the market and review them every year, says Ramona, because the costs of being a landlord rise too. She argues that rents held well below market leave nothing for repairs and compliance, and recommends raising rent to slightly below market rather than at or above it. - Under the Renters' Rights Act, Ramona says landlords can still recover a property but now have to prove their grounds, so documentation matters. She says section 21 has gone and tenants now give two months' notice, not one, which many tenants did not know. - Tenants can now ask for a pet, and Ramona says a landlord should generally agree unless there is a good reason. The deposit is capped at five weeks and an extra pet deposit has been banned since 2019, so she suggests advertising a pet-friendly home at the highest rent you will accept and putting the extra aside for damage. - A rented home has to be fit for human habitation on a continuous basis, says Ramona, which includes being safe, compliant and free of hazards such as damp and mould, but it does not have to be beautifully decorated. Tenants also have a right to peaceful enjoyment, so a landlord cannot simply turn up unannounced. - Investigate the building before blaming the tenant for damp and mould. The pair say it often takes both landlord and tenant to solve, that the cause can be the fabric of the building or how it is heated, and that landlords should keep on top of maintenance such as leaking gutters, get ventilation as good as possible, and use data loggers in fans to see what is going on. - Ramona Hirschi's Healthy House Checklist is five things every landlord should review: rents, compliance, tenants, what you would do with the money if you sold, and the business of being a property owner, meaning finance and how you own. For compliance she recommends asking a letting agent for a portfolio review, because a gap in the paperwork can stop you evicting and leave you open to fines. ## What this episode covers Is property investment still worth it, and what does it really take to be a good landlord? In this episode Aaron Worrall talks to Ramona Hirschi, a former litigation solicitor, property investor and former letting agency owner, about renting, managing and maintaining homes, and about what the Renters’ Rights Act changes. It is a frank conversation that runs for just over an hour. Ramona says she is not a financial or tax adviser, and the views are for general discussion, not individual advice. ## From litigation solicitor to letting agency owner Ramona left litigation to run her own business and started a property company, renovating houses and letting HMOs and other rentals. She tried several letting agencies and found the standard of service poor, so she started managing the rentals herself. After about seven years of that she saw an agency for sale and bought it, with the aim of giving landlords the common sense, integrity and honesty she had not found as a customer. She later sold the agency. ## What a letting agent actually does Ramona explains this through agency law, which she learned as a lawyer. An agent steps into the shoes of the principal, the landlord, and what the agent does depends on the contract. In practice that means carrying out the owner’s landlord obligations: making the property safe, finding and managing a tenant, marketing, repairs and rent. What the landlord has not delegated is being a property owner. When a property is vacant, for example, there is no landlord obligation and no rent, so no fee: refurbishing, repairing and paying the bills are the owner’s job. Ramona says it is a common misconception, and that her agency had to argue it with clients, that an agent will fully renovate a house for free during a void. The biggest misunderstanding, she says, is that hiring an agent means you can be completely hands-off. Those landlords tend to have a harder time, their properties deteriorate and they give up and sell. The best landlords have the best of both worlds: hire an agent, especially now, for all the professional running around, and focus on being the owner. ## Being the owner: finance and costs Ramona says the agent is not interested in your finances, so the owner has to manage the mortgage and the rate, whether it is time to remortgage, and whether to stay with one property or expand. She has seen landlords let their mortgage slip onto a standard variable rate and then be unable to afford the property. She also wants landlords to look at every cost, not just repairs: the agent’s cost, admin, voids, insurance and finance. A rental is a business, and you have not delegated the owner’s business to the agent. ## Rents Ramona says that in her experience many self-managing landlords hold rents well below the market. She says it is important to keep rents at market value because landlords need the extra income to cover higher admin costs, statutory liabilities and tradespeople’s bills so that the house can be safe and legal for the tenant who lives there. Aaron says landlords with good, long-standing tenants are often scared to raise the rent, and that when you do not, a lack of service follows because the money has to come from somewhere. The pair compare it to the price of food rising with inflation. ## Fix it before you sell Aaron tells landlords to invest in their property and do what is required, and Ramona agrees that a compliant house sells for more. Buyers tend to knock off far more than the actual cost of a repair when they make an offer, Ramona says, so she used to tell clients to fix it first. Aaron says the same from pre-purchase damp and timber surveys: a buyer will take off more than the cost quoted because of the effort involved. ## What the Renters’ Rights Act changes Ramona is clear that the Act is part of a larger run of regulation, and that landlords are leaving. She says the accidental landlords, who inherited a house or never wanted to be landlords, are going, while professional and corporate landlords come in, so the nature of ownership is shifting. She expects fewer rental homes to mean more demand for those who stay, and that landlords who adapt will do well. A landlord database, which every landlord will have to register on, is part of the Act. On evictions, section 21 has gone, so landlords now have to prove why they want a property back, using the grounds that section 8 already had, such as selling, moving in, anti-social behaviour, rent arrears or persistent breaches. Ramona says each ground has its own notice period and needs proof at court, and that if your documentation is in order you can normally prove it. Tenants now have to give two months’ notice instead of one, and she says tenants did not realise: she says agents had to tell tenants who gave notice early that it was now longer. On pets, tenants have the right to ask and a landlord needs a good reason to refuse. Ramona says to agree up front and put conditions in the tenancy agreement: a pet deposit has been banned since 2019 and the deposit is limited to five weeks, so she suggests advertising a pet-friendly home at a higher rent. You also cannot advertise one price and accept a higher bid. She suggests setting the extra rent aside for pet damage, and if damage is greater than the deposit and the money set aside, a landlord can sue in the small claims court, which she says is designed to be used without a solicitor, and she says few landlords bother. ## What tenants can expect Ramona says a tenant can expect a home that is fit for human habitation on a continuous basis, safe and compliant, and free of hazards including damp and mould. That is not the same as beautifully decorated, and she says tenants sometimes think it is. Tenants also have a right to peaceful enjoyment and privacy, so a landlord cannot simply turn up and let themselves in, and cannot unlawfully try to evict or get more rent. The main message is to be fair, comply with your obligations and expect the tenant to comply with theirs. One common tenant misunderstanding is that the agent works for them: the agent acts for the landlord, though it has a duty of care so that the house is safe. ## Damp, mould and ventilation As ever on The Healthy House, damp, mould and ventilation come up. The pair say it often takes both landlord and tenant to solve: with a leaking tap it is clear the landlord fixes it, but with damp and mould it can be the fabric of the building, how it is heated or several things at once. They warn against landlords saying it is the tenant before looking at the property. They say to keep on top of maintenance such as leaking gutters and brickwork, which will save thousands, and to get ventilation to the standard in Part F as best as possible so that the tenant does not have to do anything unrealistic. They talk about data loggers in fans that show what is going on, and one of them explains that drier air is easier to heat, comparing it to a wet blanket: the drier the air, the more efficient it is to stay warm. Ventilation, ventilation, ventilation, they say. ## Investing after the Act Ramona says it is harder to make money from a standard single buy-to-let and that it is now more of an active business. She says landlords, herself included, are looking at different strategies. The Act applies to one form of tenancy, she says, and not to company lets or supported living, so she is looking at corporate tenants, serviced accommodation and holiday lets, as well as keeping her single lets with a professional agent. She suggests choosing a niche and asking where the demand is. She says to think about how you own a property from day one, including whether to use a company, and to take tax advice. Ramona says she uses rent guarantee protection through an agent, which she says means an arrears case is dealt with without her worrying about it. ## The Healthy House Checklist Ramona arrives with five things. First, look at the rents straight away and keep up with them every year, using the formal procedure, to slightly below market rent. Second, check compliance: ask a letting agent to do a portfolio review of your paperwork, because a gap can stop you evicting and leave you open to fines. Third, look at your tenants: is the tenant looking after the house, and what kind of tenant do you want next time, perhaps a corporate one. Fourth, if you are thinking of selling, think about what you will do with the money. Fifth, look at the business of being an owner: finance, mortgage rate and how you own. ## Who should listen Landlords, tenants and anyone considering their first investment property. The views shared are for general discussion and are not individual legal, tax or financial advice, so take professional advice on your own circumstances. The Healthy House is brought to you by Weatherwise. Produced by Crawford & Beattie. ## Questions this episode answers ### Is buy-to-let still worth it after the Renters' Rights Act? Ramona Hirschi says yes, but it is harder to make money from a standard single let and it is more of an active business. She says costs and regulations have risen, that a model of handing a house to an agent and forgetting about it no longer works, and that landlords should diversify their strategies and tenant types and look at how they own the property. She believes landlords leaving the market means less rental stock, which she expects to push rents up. This is one person's view, so take professional advice on your own figures. ### What does a letting agent actually do, and do I still need to look after my property? A letting agent does what the contract says, which Ramona Hirschi explains is carrying out your landlord obligations: for example finding and managing a tenant, marketing the property, handling repairs and rent, and keeping it safe. You still own the property, and you are not delegating your duties as an owner, such as refurbishing it when it is vacant or paying the bills, which she says an agent paid a percentage of the rent does not do. Landlords who treat an agent as completely hands-off tend to have a harder time. ### Should I manage my own rental property or use a letting agent? Ramona Hirschi's strongest advice is not to manage your own properties unless you are a property company with an in-house team, because the work agents do behind the scenes is underestimated. She says she uses an agency for her own portfolio and that an agent will know new laws before you do. In her experience, landlords who move to an agent from self-managing often turn out to have rents well below market and something missing from their compliance paperwork. ### Does a letting agent work for the tenant or the landlord? For the landlord, says Ramona Hirschi: an agent steps into the landlord's shoes and has to act in the best interests of its principal, so the tenant is not the agent's client even though they deal with the agent on viewings. She says tenants often wrongly think the agent works for them. The agent still owes a duty of care to the tenant, which she explains extends to making the house safe so that they are not injured. ### Can you still evict a tenant now section 21 has been abolished? Yes, says Ramona Hirschi, but landlords now have to prove why they want the property back, using the grounds that section 8 already had, such as wanting to sell or move in, anti-social behaviour, rent arrears or persistent breaches. Each ground has its own notice period and needs proof at court, which she says is normally achievable if your documentation is in order. She also says tenants must now give two months' notice rather than one, which many tenants did not realise. Check current guidance or take legal advice for your tenancy. ### Can a landlord refuse pets in a rented home? Ramona Hirschi says a tenant has the right to ask for a pet and you are supposed to have a good reason to refuse, so generally the answer is yes, with exceptions such as some flats where a head lease prevents it. She points out that many households have pets and that tenants who are refused tend to sneak them in, so it is better to agree up front and put conditions in the tenancy agreement. You cannot take an extra pet deposit, and the deposit is capped at five weeks, so she suggests advertising a pet-friendly home at a higher rent and setting the extra aside for damage. ### What can I do if a tenant damages my property? Ramona Hirschi says you start with the deposit, which is capped at five weeks, and with any rent you have set aside for damage. If the damage goes beyond that, she says you can sue the tenant in the small claims court under the tenancy agreement, which she describes as designed to be used without a solicitor, and that an agent should hold photographs as evidence. Ramona says she would not let a tenant get away with serious damage, but that few landlords do it. ### What condition should a rented property be in? Fit for human habitation on a continuous basis, says Ramona Hirschi, not just when the tenancy starts: safe, compliant with the regulations and free of hazards, including damp and mould. She says it does not have to be perfectly or beautifully decorated, as tenants sometimes think, and that tenants have a right to live there without undue interference, so a landlord should not turn up unannounced. Ramona's main message is to be fair and comply with your obligations, and to expect the tenant to comply with theirs. ### Who is responsible for damp and mould in a rental, the landlord or the tenant? Often both, according to the conversation between Aaron Worrall and Ramona Hirschi: sometimes the fabric of the building is the cause, sometimes the way it is heated and lived in, and sometimes several things at once, so both sides need to cooperate. They warn against landlords saying it is the tenant before looking at the property. They say to keep on top of maintenance such as leaking gutters, taps and brickwork, to get ventilation as good as possible, and to use data loggers in fans, which show what is going on and help with any conversation about living habits. ### How can landlords adapt to the Renters' Rights Act? Ramona Hirschi says think of it as a business and adapt, rather than selling out of fear. She suggests diversifying: for example a corporate tenant, which she says is not subject to the Act, a serviced accommodation or holiday-let strategy, or choosing a niche, and she says the Act applies to one form of tenancy and not to company or other types of let. She says she converted her own HMOs to single lets because she personally does not like them, and uses rent guarantee protection through an agent. Take advice on any structure or tax question. ### Who is Ramona Hirschi? Ramona Hirschi is a former litigation solicitor, property investor and former letting agency owner, and the guest on Episode 13 of The Healthy House Podcast. Ramona left litigation to start a property company, renovating and letting her own houses, found the standard of the agents she used poor, and went on to buy a letting agency and later sell it. Ramona says she has been a landlady for 25 years and is now looking at different property strategies. ### What are Ramona Hirschi's five Healthy House Checklist tips for landlords? Ramona Hirschi's five tips are to look at your rents and keep up with them every year, to check your compliance, to look at your tenants, to think about what you would do with the money if you sold, and to think about your finances and how you own. On compliance she recommends asking a letting agent for a portfolio review straight away, because any gap in the paperwork can stop you evicting and leave you open to fines. On tenants she says to look at whether they are looking after the house and what kind of tenant you want next, including a corporate tenant. ## Go deeper - CHealthy Homes and the Law ## Share this episode - Share on LinkedIn - Share on WhatsApp - Email a link ### Follow the show - - - - - -