Landlord Finances, Taxes & Saving Costs
Being a landlord is often expensive, especially if you’re making poor decisions.
I’m not just talking about the initial capital required to put money down for a mortgage, but I’m also talking about the ongoing costs of being a landlord. It can quickly escalates because being a landlord requires continuous investment. Most notably, this business is about investing in people, particularly your tenants.
You need to provide clean and safe living conditions, you need to ensure you’re meeting all your legal requirements (which often costs money), and you especially need to expect the unexpected, which is always a money-sink.
There’s no doubt about it, this can be an extremely expensive business.
Needless to say, since this is a profiteering business, landlords are liable for income tax from any gains.
It sounds all doom and gloom, but it’s not really, it’s just a case of knowing how to keep your costs down, because it’s entirely possible. This section looks at the financial costs of being a Landlord, but mainly focusing on ways that Landlords can reduce costs and maximize profits. For an ultimate guide on how to keep costs down, I would recommend heading over to the Best Ways For Landlords To Cut Costs & Save Money article.
This blog post is probably long overdue. Actually, it’s definitely long overdue according to the surge of emails I’ve received over the last several months, from people with a profound passion for the letting industry, urging me to reach out to ‘you lot’ so we (landlords) can all band together to fight against a seemingly […]
Becoming a landlord isn’t particularly difficult. Any idiot with a semi-functioning brain and a bit of capital can jump onto this bandwagon- and they generally do. I stand before you as living proof. Not proud, just saying. However, being a “good” landlord isn’t so straight forward. There’s an unenjoyable learning curve to climb and many […]
Usually around this time of year, as the summer begins to wind down and I’m putting my Speedos away in storage, I start receiving letters from various banks informing me that it’s time for me to bend over and get shafted by their biggest and their best. It’s their loving way of telling me I’m […]
It’s always a tragic day when the Government conjure up a new and exciting way of squeezing extra pennies out of us pawns to help drag them out of the financial shit-storm they got themselves into. But they can always rely on us landlords, we’re more than happy to help, right? While I try to […]
Seasons greetings all! Hope everyone had an awesome Christmas! I’m generally not a Christmas person, but mine was pretty good (better than recent years). I’m at that awkward in-between age; too old to get into a Christmas frenzy, and too youthful, sexy and beautiful to have my own children (no one say a word). To […]
If you’re anything like me (congratulations if you are), you frequently bookmark webpages that you find interesting and/or useful because you think you’ll refer back to them one day. It’s a nice thought, but it rarely happens because we’re always too busy. Before I decided to have a clear out this morning, I had over […]
UPDATE: This article is now out of date. Unfortunately Discount Lettings no longer offers a free credit check service. Please go to the list of credit check services page for competitively priced alternatives. A few weeks ago I put up a link to a free service that allows landlords to market their vacant BTL on […]
There was an interesting/good question asked in the forum yesterday, what kind of maintenance costs landlords have had to pay over the years? Fortunately, over the last 5 years of maintaining 3-4 properties, I haven’t had to dig too deep to cover maintenance costs (from what I can remember). And in most cases, where I […]
Last week I wrote an article covering a list of Ways Landlords Can Market Their BTL Property For Free, so to keep on track with the FREE theme (because everyone likes free stuff), I’m going to write a list of free goodies available for landlords… Free Tenancy Agreements Tenancy Agreement by Letting Expert Tenancy Agreement […]
IMPORTANT UPDATE: This article is now out-of-date, and landlords may not be entitled to council tax exemption. Please read my new blog post which discusses the new Council Tax Support Scheme A month or so ago I had a tenant check out of tenancy so I was waiting for new arrivals. However, before I got […]
I’ve been taking viewings this week for a property that’s due to become available very shortly. Admittedly, the property isn’t in tip-top condition and people have pointed that out to me. Structurally, it’s sound, no problems there. I’m talking about the visual pleasantries. Well, visual horrors, in this case, like out-dated kitchen units that look […]
I got an email earlier from someone asking me what Council Tax Band their property is in. I imagine a lot of people have no idea what council tax band they’re in. I bet there’s even a few lost souls out there that didn’t even know there were different bands. Why should I care which […]
As with most tightfisted landlords, I start to perspirate and my heart beats faster when a tenant calls, because they usually only make contact when there’s bad news to report. Most frequently, to report an issue which can only be rectified by spending money on repairs. That’s never any fun. RING, RING…*[insert tenant name] calling*… […]
Buying property seems to be the easy step when it comes to property investment, and relatively speaking, so is selling property. However, it goes without saying that you don’t want your profits eaten up by the taxman, and that’s when selling property can be a little bit complicated. In principle, I always recommend getting a […]
27/11/2007 EDIT: From the 6th of April 2008 Taper relief will be abolished. Chancellor Alastair Darling announced that taper relief will be abolished, and will be replaced by a flat 18% tax rate. Following the abolition of taper relief, when any such loan notes are redeemed or otherwise disposed of after April 5, no taper relief will be […]
As far as I’m concerned, the biggest drawback to buy to let investors is the huge tax implications. You could potentially end up paying a massive 40% of your profits because of capital net gains. That’s a lot of lost profit (politicians may disagree- but who cares?). There are many reliefs and deductions you can […]
Buy-To-Let is a business, period. Anyone that has a property on the rental market is running a business, regardless of whether they push all the day-to-day responsibilities onto a letting agent and dislocate themselves from the project. I know many Landlords don’t see it as a business, but rather a long term investment which just […]
I previously put up a Mortgage Calculator; but because a lot of people have been paying their mortgages with credit cards, I decided to go one step further and put together a Credit Card calculator. This card calculator will let you see how long it will take to pay off your credit card. Additionally, if […]
Indices are statistical measures of change in the economy or financial markets. Here’s a list of the main house price indices, and how they individually retrieve their statistical data. Land registry House Price Index The Land Registery report quarterly and gather their data from the actual sale prices paid at completion. Adjustment: no seasonal adjustment. […]
Before I begin, let me make the primary message quick and painful- YES, you may have to make tax payments when selling your own property. Avoiding costs and expenditures when dealing with property is like trying to avoid bloodshed when going into battle with a hungry lion. Unfortunately, I imagine the pain of feeling an […]
It was Benjamin Franklin that famously said, in this world nothing can be said to be certain, except death and taxes. Never a truer word been spoken. For those blissfully unaware, landlords are required to pay tax on rental income. Anything landlords earn from letting property should taxed as regular income tax. Letting residential property […]
The amount of Stamp Duty you pay depends on the purchase price of the property. The rates can change, as they have done over the years, reflecting the condition of the market. In recent years, rates have been lowered and margins have changed to help first-time buyers. As it stands, these are the current rates: […]
Stamp Duty is the tax you pay when purchasing property. It is a percentage paid on the purchase of a home or non-residential property, graded into bands. Your conveyancing solicitor will typically handle this fee; it will be added onto your solicitor’s fee, which will then be accordingly directed to the govenrment. As a buyer, […]
When I received my initial quote from my conveyancing solicitor, they offered me a lot of extra optional services for extra fees. Being naive, I declined most of the additional services because obviously I want to keep all fees to a minimal. However, I did make an exception for the “no competition, no fee”, insurance; […]