If you have recently come to inherit a property, maybe in circumstances such as moving house but keeping your existing property as a secondary income.
Maybe you’ve met a new partner and moved in, leaving you in the position of having to be a prospective landlord.
At first glance this may seem a great opportunity, you now own real estate, which can bring in a second income and increase in value over the years.
But first impressions can be deceiving, the reality of being a landlord, especially when it’s thrust upon you can be anything but plain sailing. Being a landlord enters you into a world of property legislation and tax liabilities.
There are many laws that govern the lettings industry, and if you’re a new landlord who has been put in the position outside of circumstances, then you could be unwittingly breaking the law without knowing it.
So you need to be educated on the laws you have to adhere to if you are going to be a landlord. And ignorance is no excuse when it comes to the law.
The property has to be to a certain standard to let out, and this may entail having to spend out money to bring it up to good standard to attract the best rental income.
Apart from the décor, the correct health and safety regulations have to be adhered to, or you could be putting your tenants lives at risk.
A flurry of extra income is always welcome, however if you don’t know the best tax efficient ways to handle property income, then you could find yourself with a large tax bill in the future.
There are also the hidden costs of running a buy to let property; you need to budget accordingly for any unforeseen circumstances, such as a boiler repair, leaking gutters or to fix a leaking roof.
These kinds of property issues can be costly and will dent your wallet if you do not have a slush fund in place to cover repairs.
But its not all doom and gloom, finding yourself in the position of having an extra property to rent out is a great position to be in.
And there are steps you can take to ensure your tenure as a landlord gets off to a great start.
1. Get sound financial advice from a property tax specialist
Before you take steps to rent out a property, make sure you get the right tax advice. There are new tax laws in place for buy to let landlords, and you need to be aware.
A good property tax specialist will be able to advise you on the best tax efficient strategies to minimise your tax returns.
They can help you to maximise the profit from the property, both in terms of rental income, and increased property value over time.
If you are to inherit the property from a relative, then they can advise you on the probate procedures if needed.
2. Do you have the correct mortgage in place
For a buy to let property it’s very important to have the correct mortgage in place. If this is a property you previously lived in, then you have to inform your mortgage provider when circumstances have changed.
Your provider can move you onto a buy to let mortgage, if the property is not your primary residence, then you can’t have a residential mortgage.
An independent buy to let mortgage broker can search to find you the best deal across a range of lenders, ensuring you have the best interest rate will help boost the profits from the rental income.
If the property comes with no mortgage at all, it’s still a good idea to take advice, as you may want to lend against the property to carry out any Refurb work required, and still turn a profit.
3. Find the right local agent to let and manage your property for you
If you are new to buy to let and are unsure on how to find a good tenant, why not let an experienced letting agent take away the hassle of having to find a tenant, properly reference them and let out the property.
Piece of mind is worth the fee, which is also tax deductible, a good letting agents services are an investment and should represent good value to you.
Your local letting agent should be a member of the appropriate industry professional bodies. Meaning staff are highly trained to look after your needs, and abide by a code of conduct.
If you have just become a new landlord and are looking for the right tenant, and more importantly the right advice on how to maximise rental profit and have a successful let.
Why not give James Kristian a call, or pay us a visit and one of our friendly team will be on hand to give you the right advice to help you on your journey as a new landlord.