Why become a landlord?

Property is one of the most secure methods of saving and increasing wealth, with letting proving to be a reliable source of long term income. With accurate budgeting of costs, letting a property can be very lucrative. But what costs would you need to consider?

The cost of the property

If you would be taking out a mortgage to finance a second property, then a larger deposit means lower repayments. You would also need to keep in mind that a variable rate mortgage would be affected by the Bank of England base rates.

The letting price

When calculating the letting price, ideally you should ensure that the monthly income of the letting will cover the monthly mortgage repayment, with obvious financial benefits.

Property maintenance

Most landlords budget for as little as £250 per annum for property maintenance. Start with a property in good condition to reduce your future outgoings. The best way to do this is to purchase a refurbished or a modern property, or to invest in a “doer-upper". By investing the time and effort in refurbishment yourself, you can further increase the value of the property on future resale, with properties already selling for a notable profit if retained for approximately ten years. Regularly refurbish your property, especially if you wish to attract more high-end tenants. Standard, regular refurbishment costs on average about £2,000 every five years.

Tax and expenses

Depending on your overall income, you may be liable for income tax on your profit. However, your expenses can be deducted from this; including letting agent fees, insurance, maintenance and repairs, as well as interest on buy-to-let mortgages. Additionally, you can get mortgage tax relief of a substantial 20%.

“By utilizing our full management service, you can rely on us to ensure you remain compliant with current legislation within the rental market.

Alternatively, our Rent Collection Service is ideal if you want the responsibility of repairs and maintenance yourself; if you prefer certain contractors and like a hands-on approach with your tenants.

We offer a great variety of services, depending on the type of service you require and how much contact you wish to have with your tenants.

If you have the time and expertise, you can always go for the Tenant Find Only or Let Only Service. This simply involves a one-off fee at the start of the tenancy.

Contact us to discuss in detail, so that you are in possession of all the facts to make the right decision for you."

Michael Clarke – Lettings Director

If you would like to know more about letting a second property, then you can contact our Lettings department on lettings@mackenziesmith.co.uk, or call one of our offices, Farnborough (01252) 551045 and Fleet (01252) 514000, which comprehensively cover our entire branch network.