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can be quite time consuming to find tenants, collect rent
and deal with routine problems. Therefore many landlords enlist
the help of professional letting agencies. However these can
prove to be a major setback in your profits.
This is because letting agencies can charge
anywhere between eight to fifteen percent of your total gross
rental income. Therefore you might want to think about alternative
and practical solutions especially if you do not live near
the property you have given out on rent.
The figures have to be worked out carefully
once you have found the right property and the project seems
profitable. You need to consider costs that have to be covered
such as letting agency fees, fees of solicitors, landlord
insurance, furnishings or furniture charges, life cover, ground
rent and other service charges (especially if the property
is leasehold) in addition to the mortgage repayments.
The periodic costs of repairs and maintenance
also have to be added to these. You must not forget to make
provisions which ensure that mortgages are paid evenly in
case of rise in interest rates or during the time the property
is empty.
Insurance cover specifically designed for
landlords needs to be arranged by you. It is not a good idea
to go in for household policies meant for normal residents
because these are not suitable for landlords. There are various
types of policies that cover not only the buildings and its
contents but also the risks that might be associated with
renting out a property.
These might include factors such as legal
advice and protection, emergency repair assistance, malicious
damage by tenants, liability of landlords and rental guarantee.
You have to ensure that your tenants understand what possessions
they have to insure themselves.
Becoming a landlord means that there are several
types of taxes that you are liable to paying when you acquire
a property to rent out. These taxes include income tax, capital
gains tax and inheritance tax. If the total income acquired
by you is greater than your personal tax allowance in a tax
year then you may have to pay income tax. Capital Gains Tax
has to be paid on the profit you make when you sell the property.
In case the property is left to someone else
on your death, then that person has to pay an inheritance
tax. The amount for this will depend on the personal circumstances
and value of the estate. It is advisable to get a recommendation
from a professional tax adviser prior to purchasing a buy
to let property. This will enable you to understand and figure
out the best ways to lower any potential tax liabilities.
Landlord
| Tenancy
Laws Every Landlord Should Know |
The
Checklist Every Landlord Needs |
Landlord
Insurance | Landlord
Insurance for Beginners |
Best
Landlord Insurance |
Becoming
a Landlord: Secret Factors to Consider |
Benefits
of Becoming a Landlord |
Landlord
Insurance Cover - UK |
