Things to consider:
- Your buy to let investment should be considered as a medium to long term investment.
- Ensure that the rent you can achieve will more than cover any mortgage payments, service charges, agent fees and any other outgoings for the property. Also consider void periods.
- Consider and research the local market demands before making a purchase and always get advice from your local agent.
- Consider what tenants you would like, families, young professionals, sharers, company lets? What type of property and areas are each group looking for? Consider transport links and amenities.
- Look at saturation of rental properties as well as demand. Some popular areas may be saturated with properties, therefore making the risk of void periods greater.
- Present your property to high standards to attract the best tenants and higher rentals. Neutral décor and carpets and modern kitchens and bathrooms.
- Don't let your personal taste take over, the property is for tenants not for yourself.
- Beware taking on properties which may require major investment or high ongoing maintenance costs if you cannot afford them.
- Any work carried out to a property prior to first letting is not tax deductible, works and repairs after letting are tax deductible including new kitchens and bathrooms as long as they are like for like and not a capital improvement such as a conservatory etc.
- Tax deductible costs include mortgage interest payments, letting agency fees, letting costs, service charges, repairs and void period bills etc.
- Always use an agent or solicitor for a professional tenancy agreement with all the necessary clauses and up to date legislation to protect you. Do not consider off the shelf tenancy agreements.
- Always have a professional inventory & schedule of condition drawn up. Always have the inventory clerk carry out the check-out service.
- Unless you have plenty of time and plenty of contractor contacts you may wish to consider a full management service, especially if you are going overseas.
- Consider Stamp Duty Land Tax before proceeding with a property purchase. From April 2016 SDLT on Buy to Let /2nd Homes will be charge at 3% above standard rates:
Property value Standard rate Buy-to-let/second home rate (April 2016)
Up to £125,000 0% 3%
£125 - £250,000 2% 5%
£250 - £925,000 5% 8%
£925-£1.5m 10% 13%
over £1.5m 12% 15%
- Overseas companies, corporate bodies and investment schemes will be charged 15% SDLT on residential properties costing more than £500,000.
- As a Buy to Let landlord you have obligations to your tenants and need to comply with together with legislation and regulations.
- Rental income protection: you may wish to consider rental income protection cover and legal cover.
Regency Lettings & Property Management can advise you on any potential investment, we can also view the properties with you before you commit, thereby making recommendations and advising on realistic rental income. We can also organise refurbishments on your behalf.
Regency Lettings & Property Management can provide Landlords Rent Recovery and Legal Guarantee Cover from £12 per calendar month.