If you are involved with renting properties out and want to have a financially successful portfolio then these are the things you need to know and do:
1. Tax Changes - mortgage/loan interest
If you have not heard already, you will not be able to fully deduct mortgage interest as a cost from your rental income. Instead, for this year, you can deduct 75% of it. 25% of the cost will be added as a credit at the end.
You will be please to know that repairs are still fully deductible. However the 10% wear and tear allowance has been scrapped. A fie time to replace, as these costs are now fully recoverable.
Don't be that landlord that doesn't do repairs and ends up with a substandard property towards the end of the tenancy. Tenants will still be living there and they could potentially put of the prospective new tenants. Let's face it, if they are leaving they have little inclination to keep the place spotless, sure, but don't give them any more ammunition to short you down with. You want a glowing recommendation from them if possible. Ultimately any repairs that are done properly will enhance capital value, which is great if you want to re-finance, but will also potentially increase rental value, make tenants stay longer and reduce void period. On that note, if you do receive notice, talk to your tenants. You may find some shocking things that they just didn't bother reporting was ever wrong, but they thought it was easier to move than trouble you with repairs.
Don't be the landlord that everybody hates. You know, the one that wants top dollar for their property that is isn't presented accordingly. Let the agents decide, or the comparable on the market, what your property is worth. Remember the cost of your mortgage and the rent you are able to achieve are as different as chalk and cheese. Price competitively, get multiple offers, choose the tenant that suits you best. A good tenant at £1300 a month is better than a poor one at £1350.
Make sure your house is in order, literally. Have you done your annual gas safety/boiler service? Given it to the tenants? Did you register the deposit for any new tenants? Have you served them the "How to Rent" booklet, and the EPC? If any of this is alien to you, just ask.
Make sure that you are able to. This year the mortgage lenders have been asked to tighten up their lending, so your rent must be 145% of the interest only mortgage payment, not 125% like in days gone by.
Stamp duty, and loads of it. 3% is a lot. Make sure you budget accordingly.
8. The property market
Nobody knows the future, but I have predicted rent rises in the local area for several years, due to more red tape, agency fees being banned, and various other costs that ultimately will be passed on to the customer - the tenant.
Hopefully you found that useful. If you are looking for advise on your rental portfolio, or anything relating to residential property, whether selling, buying or renting, please do not hesitate to get in touch directly on email@example.com