Posted on June 20, 2019
Investing in real estate is a wonderful way to earn a steady return and it continues to be so. However, the real estate market, like any other investment market, apart from offering income opportunities, is not without its pitfalls.
So, if you’re thinking of buying property to let it out, you’ll have to carry out extensive research to understand the income potential, the legalities and the challenges involved.
You’ll have to set a budget, understand the local legislation and tax formalities. Here are some that can come handy if it’s your first time being a landlord.
Realising Likely Earnings Vis-à-Vis Expenses
Before you’re ready to purchase a property, it is crucial that you realise your likely earnings vis-à-vis expenses.
You’ll have to pay a variety of fees such as valuation, stamp duty, property survey charges, legal costs, income tax on rental income, and the like. Additionally, you’ll need to clear the usual costs for maintaining the property like mortgage interest, restoration, estate agent’s fees, landlord’s and general building insurance.
Compare the above expense heads with your proceeds that’ll come from two probable avenues: capital gains from an appreciation in property valuation and rental receipts.
Know Your Legal Responsibilities
As a first-time property-owner, you’ll have to meet some legal obligations.
For instance, you’ll need to carry out periodic inspections and repairs to ensure the property is safe to use. You’ll have to notify your tenant (s) in advance of the repairs. As a landowner, you’re required to put the tenancy security deposit in a government-certified scheme.
Once the AST (assured shorthold tenancy) expires, you’ll have to reimburse the full deposit. There are other legal responsibilities that you’ll need to fulfil as well.
Understand the Safety Rules and Leasing Laws
As you prepare to let out your home, you should make yourself aware of important safety rules.
Be sure you understand terms like GSR (gas safety record), HMO (Houses in Multiple Occupation), EPC (energy performance certificate, electricity regulations, HHSRS (housing, health, and safety rating system), and much more.
Keep Your Property Well-Furnished
A well-furnished property improves your chances of getting an occupant quickly. At the same time, preserving the décor could bring down the time your house stays vacant.
As your letting agents in Newcastle, we can provide sound advice about the home improvements that could boost your chances of getting a tenant.
Getting Ready to Receive Your Tenant
Prepare well-ahead to receive your tenant.
Make sure the property is neat and clean; keep a spare set of house keys handy; make sure that your new tenant receives utility bills in his or her name, and so on.
Provide the tenant with the AST contract, a checklist for the smoke alarm, EPC, property inventory, and the like.
Become a Landlord with the Leading Estate Agents in Newcastle
Wright Residential Co is an established property management service in Newcastle. With a network of experienced letting agents in Newcastle, we can help you find a tenant in no time. Contact us today for a free quote.