With all the new regulations and changes Buy-to-Let (BTL) landlords have been subjected to during 2016 – with more to come in 2017 – some of you might be put off from taking the leap and buying an investment property. However, before you consign your plans to rubbish heap, we want to highlight the benefits, of which there are still some, of joining the Private Rented Sector (PRS) as a landlord.
“Becoming a landlord in today’s climate may seem more daunting than ever, but if you do it in the right way you will still reap the rewards you’re targeting,” said Proskips. “Make sure you keep your long-term goals in sight and you should be fine.”
Be aware of all the investment and BTL regulations
Research is the key to getting your finances right and working in line with all the rules and regulation, both new and old. Yes, there are some newer rules that have introduced additional charges for BTL landlords that will make your initial investment a bit higher and change the way you calculate your tax payments.
However, if you buy the right property, in the right area at the right price, none of these things should really impact your monthly costs and income. Nor should they affect the fact that, if you’re in it for the long haul, the property you’ve bought will be owned outright by you after being paid for by the rent from your tenants. That’s a pretty great investment, despite having to pay a slightly higher stamp duty rate at the beginning.
“Some of the new BTL regulations may seem as though the Government and Bank of England (BOE) are specifically trying to penalise BTL landlords,” said Best Gapp. “But, even at the new higher tax rates that are relevant on some purchases, BTL landlords are still making a financially sound investment which should end up being very rewarding.”
Research is an essential tool when you’re starting out as a landlord. Seeking advice is another important job aspiring BTL landlords should undertake. Speak to friends and family who are landlords or phone up and have a chat with estate agents and property management firms operating in the areas you’re thinking of investing.
You need to have a clear understanding of what types of tenants favour different areas and property styles as well as knowing about rent levels and average void periods. Research and data can help you with this, but speaking to experienced landlords and property agents can give your real-life examples that might provide valuable insights.
Of course, experience is the best way to know what properties, areas and tenants are right for you, but that’s just not possible for new landlords. So, speaking to people who are experienced is a good substitute.
“Don’t be shy about asking for advice, even if you’re speaking to people you don’t know that well,” said M&M Property, Newington Green estate agent. “Talking about property is a well-known favourite pastime for Brits so use that to your advantage and give those who are willing to discuss the finer points with you a good grilling.”