By Alex Madden
There are certainly many pros to being a landlord, for one there is a huge demand for rental properties. Only last year there were 7.9 million residential properties being rented in the UK. Many people think becoming a landlord means getting a lot of money for not doing very much but that’s not strictly true.
Being a landlord can be time-consuming and complicated with all of the obligations and legalities and it’s not always for everyone. There are many pros and cons to being a landlord and below are just a few:
- Low risk investment – return on property/land is fairly steady. Stock values can fall but land won’t do a disappearing act on you
- Income – this is the main reason many people consider becoming a landlord. With tenants who pay the rent on time, this can bring you a steady stream of income and enough to pay the mortgage. This allows you to hold on to the property while it gains value
- Tax deductions – all rent a landlord receives is taxable and the mortgages tend to be a higher rate than others, however so this doesn’t discourage people to become landlords, there are a few tax deductions available: Replacing damaged furniture, replacing water pipes, cleaning, gardening, insurance, repainting, interest on the mortgage, water rates, Council Tax, gas and electricity
- Financial cost to you – becoming a landlord can also see you having to part with sometimes a large amount of money on such things as: Gas Safety Certificate, tax on rent, Energy Efficiency certificate, repairs and maintenance, potential letting agency fees, landlord insurance and tenancy deposit scheme
- Time – when a tenant leaves your property they may not leave it in a state to be able to rent it out straight away. This will cost you time and money. Not only will you have to pay for any work to be done, you will have to pay the mortgage yourself during this time and also spend your own time getting builders and decorators in. It might mean you can keep the previous tenants deposit, but depending on what work needs to be done, it may not cover it
- Dealing with problem tenants – the majority of tenants will pay rent and treat the property as their own, but it’s inevitable that you will get a problem tenant down the line. Make sure you are savvy with tenancy laws and eviction rights and be prepared to use them
The lists of both pros and cons can go on and on however don’t let them daunt you too much. There is loads of help and support around for landlords if you look. Whether you are a landlord of one house or own business sites around the country you can get help and advice. The National Landlord Association has advice and memberships to help protect landlords, your insurance provider can help you choose the best insurance for the property and even your energy provider can help by giving you advice on how to make the property more energy efficient.
For more advice on energy efficiency for your property, visit – http://www.npower.com/business/