If you’re lucky enough to be in a position where you can afford to buy a new house without selling your current property, this can raise a number of interesting possibilities.
The most obvious one is of course to rent your property out and make some extra income. What exactly are the benefits of doing this however?
The main reason people consider becoming a landlord is because of the additional income it can generate. The rent you receive from tenants can contribute to or even completely cover your mortgage payments so if you do have a second home, this seems like the logical thing to do.
The property will increase in value
Another huge benefit of renting out your property is that you get to hold on to it while it (hopefully) increases in value.
Any rental income you receive is taxable but in order to prevent people from being discouraged about becoming a landlord, there are a number of tax deductions available to help counteract this. This includes expenses for:
- Replacing water pipes
- Buildings and contents insurance
- Accounting processes
- Replacing damaged furniture
- Cleaning and gardening
- Professional services
- Depreciation in the form of wear and tear (usually around 10% of the gross rental income)
Anything tax related can be complicated and in order to avoid getting into trouble with the Inland Revenue, it’s always advisable to seek advice from a qualified accountant. ICAEW Chartered Accountants can help you to find a reliable and professional accountant as their website member search allows you to verify individuals and ensure that they’re properly qualified.
People are always going to need somewhere to live so being a landlord normally offers solid, reliable and long-term security. The extra income you generate can be put towards mortgage payments, savings for holidays and renovations and even your pension.
Another benefit is that if for some reason your living arrangements change, you always have this property to fall back on for somewhere to live.
Rental properties are in demand
As house prices remain sky-high, it means that there’s a huge demand for rental properties.
Just this month, new figures from Rightmove revealed that asking prices for homes in England and Wales have reached a record high. The outcome of this is that people are finding it harder than ever to not only get onto the property ladder in the first place, but also to upgrade to a bigger house when they need more space.
The only solution for those who want to live in a certain area or who require a specific amount of rooms is to rent. This means that for the foreseeable future, being a landlord should be a safe investment.
You don’t have to manage everything yourself
One of the things that puts a lot of people off being a landlord is the amount of work that’s involved. It is true that managing a rental property requires effort but the good news is that you don’t have to do it all yourself.
Enlisting the help of a letting agent means that they can take care of everything for you from ensuring that you’re complying with safety regulations and showing prospective tenants around the property to doing reference checks, preparing tenancy agreements and arranging any necessary repairs or maintenance.