Everything you need to know about Cash ISAs
Check out our back to basics, easy to understand guide to Cash ISAs.
Buy-to-let has often been cited as a ‘retirement plan’; an opportunity for those who may have several homes outside of their main residence to let on the open market and to generate further incoming capital to garner a significant lump sum for later life expenditure.
What should you know about buy-to-let?
If you’re looking to purchase your first buy-to-let, rent to a family member or add to your property portfolio, we’ve outlined four points to consider below:
Remember that not all properties are acceptable for letting
It’s worth noting not all properties on the market are suitable for letting. Lenders have different criteria for the properties they deem acceptable to lend against, therefore, make sure you determine the following: 1.) If the property is a flat, check if it is freehold or ex-local authority, 2.) Decide if you intend to use it as a multi-occupancy property or not (many lenders do not consider lets for students), 3.) Confirm the length of the lease remaining, 4.) Ensure the property has a minimum EPC rating of E.
Be aware of the risks involved
Demand for rental property can fluctuate and, of course, the value of your property could increase or decrease. If rental demand falls then you may have periods where your property remains empty. There could be other reasons why you may not be able to rent your property. For example, if the rent is set too high or the location is wrong, your tenant footfall could be a lot lower and you may start losing money.
Understand tax implications
The buy-to-let market has been affected by tax changes recently, meaning extra stamp duty on purchasing a buy-to-let and changes to the ability to offset all buy-to-let mortgage interest against income tax. Ensure you seek professional advice from a tax specialist as rental income is taxable.
Consider using a letting agency to find tenants
Using a good letting agency to help streamline your properties is beneficial for a number of reasons. Not only can they offer support to ensure you meet your legal obligations as a landlord, they may be able to let your property out more quickly, get you a better rental price, deal with tenant referencing and checking, provide a suitable inventory check and handle the deposit, and deal with problems that arise during the tenancy so you don’t have to.
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGANST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPLAYMENTS ON YOUR MORTGAGE.
