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Many of us around the UK are looking at ways to boost our income, for some of us that may be from becoming a landlord. Whether it be renting out a room in your house to renting out an entire house/flat, it is certainly one to consider if you have the space and finances to do so.
However, it might not always be as simple as it seems. With so much to take in, here are our top things to consider before becoming a landlord:
- Getting the best mortgage deal – if you are looking to buy somewhere to let, it is key to keep your costs as low as possible. As your mortgage is going to be the biggest expense going out it makes sense to try and get the best deal possible. When purchasing our house we have always used an independent mortgage broker to get us the best deals. Of course, the bigger the deposit you have the better too.
- Don’t underestimate your costs – It’s not just your mortgage you are going to be paying out for, you need to allow for a maintenance budget or for any refurbishment that may be needed. You will also need to take into account agency letting fees which will vary depending on what you are asking the agency to do.
- Take out insurance – As always there are different levels of insurance in place for landlords and I would highly recommend going for one that covers as much as possible. Make sure you do some research into the right one for you and compare landlord insurance to make sure you are getting the best price.
- Put aside some profit for your tax bill! – Making money from renting out a property means you will need to be registered for self-assessment. I always advise people to put at least 20% away from self-employment income or if you can 30% away, this means your tax is covered and you don’t get a nasty surprise at the tax year-end!
It is a lot to take in when you are looking at ways to save for your future and looking at investing in property. With lots of horror stories around about bad tenants and experiences, it is, of course, easy to be put off. Just make sure before you jump in you do your research and go into it with as many facts as you can.