Six questions that landlords need to ask themselves when looking at a buy-to-let investment
As 2017 is underway, landlords should be planning for the year ahead and asking themselves the following questions.
What are your goals, and is your portfolio organised correctly?
It is a new year so perhaps it is time to take a look at your portfolio. Is it time to raise some cash through selling a property, or do you have the ability to make further purchases?
Put a plan together to help you achieve your goals.
Would remortgaging help to save money through finding cheaper deals?
Go through your finances with a sharp eye. Currently, mortgage rates are low, so it is likely that they may not be available for much longer.
Therefore, consider remortgaging in order to take advantage of the deals that are available to you.
Do you visit your tenants on a regular basis?
Perhaps you have got into the habit of not visiting your tenants, believing that as long as you receive your rent then you can sit back and not worry.
However, it helps to pay a regular visit to your tenants. This will enable you to see whether they are taking care of the property while also building a relationship with them. This will help you to keep on top of any problems should they arise.
Do I have the correct landlord insurance?
You will be well aware that landlord insurance is important. However, even if your renewal dates are a few months away, it is worth assessing the situation to make sure that your current cover is sufficient for your needs.
A lot can happen over a year, such as a change in tenant or the value of the contents, all of which will mean that you need to change your insurance so that it is up to date.
The new tax changes – do I understand them?
There have been a number of tax changes brought in and there are more to come. There has been a decrease in tax relief available to landlords, with plans to remove it altogether and replace it with 20% tax credit. Therefore, it is important to ensure that you are ready to pay more at the end of the year.
There is also the increase in stamp duty on additional properties, so it could be worth considering purchasing through a corporate structure so that you benefit, from a tax perspective.
Has the time come to increase rent?
As the tax changes mentioned above come into effect, it is important for property owners to consider increasing their rent in order to cover these costs.
At the beginning this may seem like a favourable idea; however, it is important that you do your homework. This is because you will need to consider how much other landlords are charging in your area – you will not want to force a tenant out of your property because the price that you charge is higher than others.
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