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Becoming a landlord is an increasingly popular option for homeowners looking to generate an income from their property. Many people buy to let as an investment, and it can be a sound investment if done well. However, there are several things that potential landlords need to be aware of before they buy.
Income…
There are many benefits to being a landlord, which is why a lot of people buy to let in the first place. It sounds quite simple really, but generating income on your property is probably the biggest benefit overall and it’s possible to make substantial amounts over time that can be used to pay your mortgage.
Tax Deductions…
Although buy to let mortgages often have higher mortgage rates, you can apply for tax deductions on the income generated by your property that is used for maintenance, e.g. repainting, furniture replacement costs, etc. Landlords can also apply for deductions on insurance and accounting fees.
Long-term security…
Renting a property can provide an ongoing income which can be saved as a pension, or for a ‘rainy day’, plus – if your living situation changes – it’s also possible for you to use the property yourself (so long as you uphold any contracts signed with tenants).
Although being a landlord has plus points, there are some disadvantages you will need to be aware of before you consider becoming a landlord yourself.
Time…
Being a landlord can be a time-consuming job. In addition to time spent sorting contracts, undertaking maintenance, sorting any disputes and dealing with taxes, you’ll need to spend quality time vetting prospective tenants.
Financial Extras…
It’s not enough to simply have a house to let; being a landlord can incur many further expenses, not all of which are tax deductible. Some common costs include, tax on rental income, tenancy deposit scheme, gas safety certificate, energy efficiency certificate, repairs and maintenance, landlord insurance, etc.
We offer 3 clear levels of service for landlords from a basic tenant finder service up to a fully comprehensive lettings service which includes financial management, property maintenance, and tenant handling. For advice on becoming a landlord, or for more information about our lettings services, please call your local branch!
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