The accidental landlord is a common term in the property world. It is often the case that when a previous home cannot be sold it is kept and rented out to earn a little extra cash every month. This is how many people realise how profitable being a landlord can be.
So why wait for this opportunity to fall on your lap when there are so many convincing reasons to become a part time landlord today. Here’s just a few:
The money
The obvious plus of becoming a landlord is the extra income coming in every month. Just one property can earn an average of £678 per month in rent with landlords keeping around 40% of this, after fees. This should be enough to cover the mortgage and maybe some spending money too – which isn’t bad for an extra earner on top of your monthly wage.
The investment
Letting out a property is an investment. Whether you’ve bought a property specifically to rent or have chosen renting instead of selling your property, this is still a big investment in your life. The benefit of this is the long term security it can offer, paying into what could be a pension or a rainy day fund, and not forgetting there is also the return you can get from selling the property at a later date.
The flexibility
Through managing your own business and property the decisions are left to you. You’re the boss in this situation with the ability to choose everything from the right tenants to which assets to include. The freedom can be liberating.
Now it wouldn’t be right if we didn’t make you aware of the downsides too:
Tax
All income you receive from being a landlord is taxable and you will have to deal with the relevant paperwork. However there are some areas that are tax deductible including money spent on maintenance around the property from repainting, replacing damaged furniture and cleaning around the home. Any expenses used for professional services can also be tax deductible including cleaning, decorating and maintenance.
Maintenance
From small, seemingly insignificant issues to big emergencies, as a landlord you will be the first point of call for tenants. So be prepared for frantic phone calls in the middle of the night and spending some of your time dealing with DIY jobs or organising the relevant professional to get the job done right. This can be time consuming and frustrating, and so weighing up the cost of an agency to deal with these issues could be beneficial.
Legal issues
Without an up to date knowledge on property laws and legislations you could be getting yourself into a dangerous situation without even realising it. Plus issues relating to late payments, rent disputes and evictions can get messy. With this in mind, using an insurance agency such as UKinsuranceNET that specialise in specific landlord insurance, can give you both advice and peace of mind when it comes to your property investment and monthly income.
So there you have it, some of the ups and downs of being a landlord. It can be an extremely rewarding job but make sure you’re prepared for the potential negative side and don’t leave yourself vulnerable.