Letting a buy-to-let fully furnished
- 21st December 2011
- Property Tips
Claiming full tax deductions and a good inventory are crucial for letting a furnished property profitably.
With the January lettings rush just around the corner, many buy-to-let landlords are racing to get their properties in top shape for viewings when renters return after the Christmas break.
Many London landlords offer their properties fully furnished in order to target the student and young professionals markets. With less furniture of their own than older tenants, a furnished rental property is much more attractive to them.
Some tenants, such as long term renters who can’t get a mortgage, have less need of furniture. Landlords choosing to target them can benefit from having fewer issues to deal with if the furniture breaks or the tenant wants it to be replaced.
These are some of ludlowthompson’s tips on letting a property fully furnished.
Claiming the full tax allowance
- Landlords can claim up to 10% of their net rent from the property for ‘wear and tear’ to the furniture and white goods or the cost of replacing particular items of furniture.
- It is therefore important for landlords to keep a good record of the costs they incur maintaining the furnishings in their rental property.
- If the landlord’s portfolio consists of a mixture of furnished and unfurnished properties, the 10% ‘wear and tear’ tax deductions are only available on the furnished properties.
Inventory crucial to minimise disputes over the deposit
- Landlords who decide to let their property furnished are protected from damage to the furniture beyond reasonable wear and tear by the deposit.
- A full and detailed inventory at the outset of the tenancy is crucial to minimise disputes in the event that the tenants do cause damage to the furnishings.
- The cost of a professional inventory provider is tax deductible, should the landlord wish to use one.
Stephen Ludlow, Chairman of ludlowthompson, says: “Landlords sometimes treat all their properties the same and provide them furnished or unfurnished depending on their preference. However some flats might be most suitable for younger professional tenants and sharers who prefer furnished properties while others might work better with older renters who bring their own furniture.
“Knowing which market to target can be important – fully equipping a flat and then having to put all the furniture in storage because the tenant does not want it can be a real pain.”
For landlords opting to provide a furnished rental property, a managed rental service can be particularly useful as the professional estate agents will have a lot of experience of dealing with any tenant problems regarding the furniture.
Some flats might be most suitable for younger professional tenants and sharers who prefer furnished properties.
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