You need a great deal of time, commitment and patience to be a landlord. We’ll help you weigh up your legal and financial obligations so you can decide whether it’s for you.
This is undoubtedly the main reason for becoming a landlord.
You'll get a sum of money every month from your tenant. It can help to repay your buy-to-let mortgage if you have one.
The returns on your property investment will be even greater if you own the property outright.
All rental income a landlord receives is taxable and you can’t get tax relief on mortgage interest any more, even though buy-to-let mortgages tend to have higher rates than others.
But there are still a number tax deductible expenses including:
Renting a property can provide an ongoing income which can be saved as a pension (subject to certain criteria, your tax status and contribution allowances), or for a 'rainy day'. Plus, if your living situation changes then you could always live in the property yourself (so long as you don’t break any contracts signed with tenants).
Being a landlord is like managing your own business, which can be very rewarding. You get to make the decisions on costs, contracts and terms. You can also decide whether or not you want to sell the asset, and when.
Despite some tax breaks, you'll have to pay tax on any rental income and deal with the paperwork.
The thought of being in control of your own investment may be appealing, but if you've put resources into a rental property you shouldn't be thinking in the short term.
If or when you choose to stop being a landlord, it could take some time to sell the property and release your assets.
Being a landlord can incur many expenses, not all of which are tax deductible. Common costs include:
Burst pipes, lost keys, broken boilers... all the household emergencies that could apply to you at home apply to your tenants, too.
Unless you employ an agency to deal with this sort of thing (an extra expense), you need to be prepared to deal with panic-stricken phone calls from tenants at all hours of the day or night.
A broken door handle or dripping tap may be the sort of thing you can fix yourself, but you can’t expect your tenants to do it.
Even small maintenance tasks can take a lot of effort to put right. Especially once you factor in the time spent arranging a property visit, sourcing and booking a handyman, and communicating with tenants.
You'll need to be up to speed on the latest property law and legislation affecting landlords, and know where you stand when it comes to late rent payments, deposits and evictions.
If things turn sour with tenants you can expect to spend a lot of time - and potentially money - sorting things out.
Being a landlord can be a time-consuming job. As well as managing contracts, undertaking maintenance, dealing with disputes and sorting out your taxes, you'll need to spend time vetting prospective tenants.
You can pay an agency to do this, but if you go it alone, you need to view the potentially lengthy process as an investment - good tenants shouldn't cost you anything, but bad tenants almost certainly will.
"Being a landlord means cutting any emotional ties to your property"
It can be a bit of a wrench allowing new people into your property, especially if you've lived there yourself and view it as your home. Being a landlord means cutting any emotional ties to your property and learning to deal with wear and tear or your tenant’s questionable taste and habits.
Landlords - particularly buy-to-let landlords - often get a raw deal in the media, especially during periods of housing crises. But by being a good landlord, you’ll help to remove this stigma.