Earlier in the year This Is Money reported that there was a rise in the number of Landlords in the past year, this lead them to offer advice on how to ensure buy to lets were making them money.
Take care of your tenants:
Becoming a landlord is not just about getting the mortgage. There are practical issues, too, such as finding tenants, managing the property and preparing for periods when no rent is coming in.
A letting agent can market the property or manage it. This means creating contracts for tenants, collecting rents and taking deposit payments, as well as calling out tradesmen if there is a problem.
Lenders are also increasingly cautious about handing out mortgages to landlords with tenants on benefits. By law, landlords must put their tenants’ deposit in a protected scheme 30 days after receiving it.
This is a way of protecting tenants’ money should they dispute the amount of deposit they are returned at the end of a rental period.
Don’t forget your tax bill:
As buy-to-let investing is a business, it is treated that way by HMRC. It launched a campaign to make sure anyone who has ever sold a buy-to-let property had paid their tax in full profit from renting a house is treated like any other self-employed income.
If you already have a full-time job, you’ll pay income tax on your profits at your highest marginal rate, so usually 20 per cent or 40 per cent. You’ll probably have to fill out a self-assessment tax return.
Remember that tax is paid only on profits and there are many things that can be deducted, such as interest payments, for example. If you made £25,000 a year in rent but your interest-only mortgage payments came to £10,000, you could knock the £10,000 off the rental income – meaning you would be taxed only on £15,000.
When you sell, you will be hit with capital gains tax on any profit you make over £10,600 a year at a rate of 18 per cent or 28 per cent – depending on whether you are a basic or higher-rate taxpayer.
Belvoir Lettings Sheffield is the One Stop Specialists for Lettings including Property Management, Tenant Find, Investment and Wealth Management Advice, Fit-outs and Renovations, Furniture Packs and Investment Property Insurances and Mortgages.
Belvoir Sheffield was the winner of the Belvoir Franchise of the Year Award for 2013.
For more information, please visit www.belvoir.co.uk/sheffield or call 0114 25 25 215.
Alternatively, please email us at sheffield@belvoirlettings.com For the most uptodate information relevant to landlords and buy to let in the UK, and specifically the Sheffield Buy-to-Let Market ensure you follow Belvoir Sheffield on either facebook at http://www.facebook.com/belvoirsheffield, Twitter at http://www.twitter.com/belvoirsheff, or visit our website at https://www.belvoir.co.uk/landlord-information.
News feed from: http://www.thisismoney.co.uk/money/mortgageshome/article-2288972/How-cashbuy-let-mini-boom.html
