How To Become a Landlord
Being a landlord sounds nice, doesn’t it? Surely there can’t be much to consider other than ensuring your property is suitable for somebody to live in and then collecting rent each month?
You’re right, being a landlord is an incredibly rewarding role to take on, but it’s definitely not easy. Managing a property can be extremely time-consuming, and similar to running a business. It is important to maintain accurate records and provide good customer service, just like any other company.
Mortgage and Insurance
If you are letting out a mortgaged property you must get your mortgage lender’s approval before you can let the property, as not doing so could lead to repossession of the property.
Having the correct Landlord’s insurance is essential. Your normal insurance policy is unlikely to be valid, even if you have simply taken in a lodger. If you are unsure about the insurance you should be taking out speak to your insurance provider as many of them have policies specifically targeted at Landlords.
When finding an insurer it is important to note whether or not you need building and contents insurance. Building insurance covers the building but may not cover soft furnishings such as carpets and curtains included in the letting. It is also important to pay close attention to clauses surrounding the topic of unoccupancy, you may still need to carry out property checks, even if your property is vacant.
Stamp Duty changed in April, now if you already own a property and would like to buy another you should expect to pay much higher rates of stamp duty. There are two tiers of stamp duty; one for first time buyers and a higher tier for people who are buying additional properties.
If you are thinking of buying a property to rent out, be sure to speak to a financial adviser to make sure you’re aware of the cost associated with your purchase.
Find out more about stamp duty here.
If you’re letting out a property, it is really important to notify Inland Revenue, even if you are only letting out a room in your home. If the room is in your own home, you may be eligible for tax relief on the rental yield. You are able to contact HMRC who will be able to give you advice based on your particular circumstances. Alternatively you can speak to a financial adviser to find out more about your tax obligations. It is vital that you keep a record of all your rent collections and payments as these will help you to complete your tax return.
Managing a property
Managing a property is hard work but with the right amount of time and commitment it can be done well.
If you decide to self manage your property you should be aware that your tenants may get in touch at any point, particularly if there is an urgent problem needing immediate attention. So, if you don’t want to give up your Friday evenings to tenants with no hot water or a leaky roof or maybe you work full time or spend a lot of time travelling, hiring a letting agent may be the best option for you.
Get in touch via our contact form to speak to us about our management fees and tenant find only packages.