15 Tips for new 'reluctant' landlords
- 12th October 2010
- Property Tips
Some young homeowners are moving back in with mum and dad and renting out their property: what to expect?
The current rental market demand is a godsend for young homeowners needing to rent out their home following a loss of income or higher expenses.
So called 'reluctant landlords' won't be prepared for what to expect and will have many questions. ludlowthompson, London's Letting Agent, offer some top tips for landlords getting started on the lettings market. ludlowthompson let and manage for thousands of tenants and landlords across London.
Top 15 tips for new landlords
- Choose a long established reputable letting agent who is a member of ARLA - the higher rental they will achieve you will typically cover their fees.
- Remember that rental income is taxable but has many tax deductible allowances.
- Remember the cost of letting agents fees are tax deductible as are accountants fees.
- Set aside 10 percent for cost of repairs. This will also reduce your taxable income.
- Keep records of rental expenses in case you are asked by the taxman. Record your income on your tax return.
- Consider a rental warranty/legal expenses. This will cover you for any rental arrears.
- Arrange tenancy break clauses for 'easy rental periods'. Summer and after Christmas are the most active times. Seek advise from your letting agent.
- Don't over-furnish. Keep decor neutral, and remove any personal items.
- Don't include bills in the rent. Energy costs are volatile and you may find yourself out of pocket.
- Remember council tax is paid by the tenants.
- A letting agent may assist with handover of utilities - ask.
- Create a tenants' handbook. Put electrical appliances under service contract so that emergency engineers can be called by the tenant. Also include heating and boiler instructions, council tax details, parking, bike storage, and bin collections.
- Check tenant references. A reputable estate agent will do this for you, as well as a credit checks, a full inventory, and taking a damage deposit.
- Don't just accept the first tenant: look at their ability to pay the rent/references.
- Get written permission from you mortgage lender and insurer, so you don’t breach your finance terms and conditions.
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