Here is a quick check list to work through costing your income yield compared to expenditure for BTL, rental property and investments.
Be honest with yourself and be prudent. If it still works out in your favour the market is as good a return as any, as long as you do not over finance, expect miracles and remember nothing is FREE! (except love)
First and foremost – it is a business
Areas to consider;
- Government and Local legislation.
- Lending is it affordable – check with a financial advisor in advance.
- Purchase costs – SDLT / conveyancing fees
- Yields – do not forget hidden costs.
- Void periods for maintenance / cleaning /next rental
- Maintenance & larger asset / fixtures & fittings replacements
- Insurance / ground rent / service charges
- Selective / HMO
- Trade associations / Council Tax / Data protection / training
- Target market
- Tax – income / capital gains & inheritance tax – get advice from a specialist. Your current income and many other factors can affect tax paid especially in multiple homes.
- Mortgages – If not a BTL mortgage you must get permission from your lender on a domestic mortgage. Some mortgages have restrictions e.g. No benefits or rent sharing.
- Insurance – the same applies inform your insurance company for buildings & take out landlord insurance separately.
Homematch can refer to you professionals for tax, law, and accounting.
We have landlords looking to sell on their investments with tenants in-situ!
Lynda Martin January 2022