Finance > Real Estate > How To Be A Successful Landlord
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Article rating : 0.00, 0 votes. Author : Don Suter
With house prices rising faster than rental incomes, it is becoming more difficult to make a successful living from buy-to-let. We look at ways for landlords to maximise their profits and avoid financial difficulty.
Remortgage
Buy-to-let mortgage rates used to be charged at a premium compared to their residential equivalents. However, increased competition in the sector and other factors has led to a reduction in the cost of a buy-to-let loan. You may be able to save some money by remortgaging, provided there are no penalties for quitting your existing loan.
Manage the property yourself
Most letting agents will charge around 6 - 8% of your rental income for finding a tenant and a further 6 - 8% for managing the property.
If you are prepared to do the work yourself, you could make significant savings on your property costs. Consider advertising to potential tenants directly by listing your property on some of the property letting portals and taking on the management tasks yourself.
If you have a number of buy-to-lets and do not have the time to manage the properties yourself, make sure you negotiate a good discount with the agent in exchange for managing your full portfolio.
Cut your tax bill
You are required to pay tax on income earned from your buy-to-let property, however you can offset this with as many legitimate costs as possible.
Many brokers recommend interest-only mortgages, as you can set the interest against your tax bill. Unlike a repayment mortgage, where the level of interest reduces over a period of time, the level remains the same on an interest-only mortgage for the duration of the term. This means that your level of tax relief will also remain.
Remember that you can also offset the other costs of running your buy-to-let business, such as repairs and purchases of furniture and white goods.
Don Suter is Managing Editor of the UK Property Portal (http://www.ukpropertyportal.co.uk), an online directory for UK property sales, rental, surveyors, mortgages, conveyancing, property insurance, removals, news, investment and development.
For more information on buy-to-let, search our property advice pages.
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