Email us at Info@HausLiverpool.co.uk   
Call us on 0151 559 1111   
Home For Sale To Rent Vendors Landlords News Insurance About Us
News
Are you an Accidental Landlord?
Posted by Ed on 12 April 2018
Some landlords become a landlord out of a necessity and not a desire to be the next property millionaire! When a buyer hasn’t been able to sell, or maybe they are in negative equity, can’t afford the mortgage payments or even inherited a property or have an empty property after moving in with a partner or blending of two family units into one homes…it’s not always about making big money!

This 5 step guide will help you cover the basics of getting started if you find yourself in this predicament;

STEP 1: FINANCE

First things first: is your property mortgaged? If so, you will need a buy-to-let re-mortgage or under some circumstances a consent to let from your mortgage provider. These normally come with conditions and each lender is different. Some will allow a consent to let under certain criteria and there will be an administrative fee to pay. However, some lenders may require the mortgage is changed to a ‘buy to let mortgage’ – these normally require a 15-20% equity and if you have less than this then you may have to make up the shortfall. Also note interest rates on buy-to-let mortgages also tend to be slightly higher than residential mortgages, and they come with other conditions and remember just like a residential mortgage, if you fail to make your payments your home may be repossessed.

STEP 2: PROPERTY MANAGEMENT

Landlords have a duty of care to their tenants and many legalities surround this relationship. These include rules governing how you select tenants, how you manage property repairs, ensuring that certain safety standards and regulations and certifications are met, when and how you can enter the property, how you handle the deposit and return of the deposit, when and how you can evict tenants among many others.

Some landlords do self-manage but if it is a first time, there are many mistakes that can be made and the tenants have so many rights. The law is very strict on how many aspects of letting and property management are handled and if improperly managed could result in losing the tenant, not receiving any rent or being ordered to compensate the tenant and being even further out of pocket. It is always wise to use a reputable letting agent who have experience in the field and who are members of a regulatory body such as The Property Ombudsmen, the National Approved Lettings Scheme and the Association of Residential Landlord Association (ARLA), of which Haus can claim accreditation and participation in all three of those.

Bear in mind there is a cost element to using a letting agent for their services so it’s always good to get a no obligation rental appraisals to see how much rent can be achieved and what the cost will be, so you know how much net income you will have left from the rental.

STEP 3: ON-GOING COSTS

· On-going regular costs will likely include mortgage repayments, buildings insurance (plus contents insurance for any contents you provide as part of the tenancy), annual gas and electrical installation safety checks, monthly management fees (when a letting agent is used for property management), boiler cover (if taken out), other insurance you may have, rent protection insurance (if taken out) and tax on income (where applicable)

· There will be other costs to consider such as a budget for any repairs. You never know when a repair might come your way and some can be costly – for example, a boiler replacement. It’s always good to keep some funds held aside for things like this, or an emergency credit card for instance as an issue to do with property safety or tenant safety can cause a lot of issues if not resolved swiftly.
Keep a detailed account of all ongoing costs and one of expenses is vital so you can keep track of your income and expenses and track any profits made or losses incurred and also for any eligible tax deduction items.

STEP 4: TAX

As a landlord, the profits you make from renting your property will be subject to income tax. If you sell your property at a profit, you would also be liable to pay capital gains tax (CGT).

Tax on rental income is in addition to money you make from any other employment, and your personal allowance is only applied once. You will need to declare everything you earn; however, it is possible to offset certain business expenses against your rental income only (not income from any other source) before tax is deducted. Similarly, costs incurred in the purchase, sale and improvement of your property can be offset against the profit from the sale when calculating CGT, as can losses made in previous tax years. Furthermore, you can claim some forms of relief, including a special ‘private residence relief’ if you’ve ever lived in the property yourself.

Tax can be a complicated matter and it may be worth hiring an accountant, but this will add in to your expenses too remember!

STEP 5: TENANT RELATIONS

Good relationships between landlords and tenants is key! Having a letting agent involved does reduce the burden on the landlord somewhat as they are the middle man who should be ensuring your best interests at all times while also ensuring a duty of care over the tenants too. From my experience in lettings, keeping communication lines open is vital and although you might not agree on many issues with the tenant, finding a compromise is usually the best way forward as any legal actions can be costly and a lot of the time decisions formally can sway in favour of a disgruntled tenant.

Failing to maintain properties or fix problems quickly enough is usually the biggest cause of most landlord – tenant disputes so even though the issue might not be urgent or seem important in your opinion it is important to at least acknowledge their request, have someone look at it (even yourself) and then manage their expectations from there. Another important note to mention is the right your tenant has to receive the peaceful and quiet enjoyment of the property without harassment from the landlord, and any bombardment of calls and texts or visits without an appointment, particularly anything outside of normal working house would constitute harassment and any landlords experiences difficult tenants or access issues should consult professional advice.

If you are an accidental landlord looking for some help call us at HAUS LIVERPOOL on (0151) 559 1111

Share
FaceBook likes      Tweets     
Property Search
Rent p/person p/week (£)
 to 
No of Bedrooms
 to 
Property type
Location
Postcode
Submit
Contact
First name: Last name:
Email address:
Phone number:
Message:
How did you hear about us:
Submit
Help
Fees / Client Money Protection
About
Testimonials
Contact
Privacy Policy
Landlords
Management Login
Contact Us
Call us on
0151 559 1111


Haus Liverpool
72 - 76
Renshaw Street
Liverpool
L1 4EN
Latest Tweets
Property of the day - Langton Road. 4 Bedroom Student House in great location with 10% yeild. https://t.co/3WdZRXO59f

Lots of space on offer with this three double bedroom mews house. Located in L3 and is in within easy reach of Liv… https://t.co/0m5MM5FMfd

We just love this apartment ( with a secret communal garden 🤫) £184,950 offering lots of space, original features a… https://t.co/2eq4hYRH2P

Follow Us
Facebook
Twitter
Haus and Liverpool Student Lets
Newsletter Sign Up
Submit
© Copyright 2017 Haus Liverpool. All rights reserved. Design by Hewitt & Co.