Here are some of the more common landlords costs and taxes that you’ll need to consider.
A Mortgage is probably the single largest landlord cost. However, you also need to be aware that if your property is mortgaged, you should obtain your mortgagee’s written consent to the letting. They may require additional clauses in the tenancy agreement of which you must inform us.
Whilst we don’t offer mortgage advice, we can point you in the direction of a couple of good mortgage brokers in the area, so please contact us for further information.
If you are a leaseholder, you should check the terms of your lease, and obtain any necessary written consent before letting.
You should ensure that you are suitably covered for letting under both your buildings and contents insurance. This is a landlord cost that should be carefully investigated to be sure you get the right cover for your property. Don’t necessarily go for the cheapest.
Please also be aware that failure to inform your insurers may invalidate your policies. We can provide information on Landlords Legal Protection, Rent Guarantee Cover and Landlords Contents and Buildings Insurance if required.
Bills and regular outgoings
We recommend that you arrange for regular outgoings e.g. service charges, maintenance contracts etc. to be paid by standing order or direct debit. However where we are managing the property, by prior written agreement we may make payment of certain bills on your behalf, provided such bills are received in your name at our office, and that sufficient funds are held to your credit.
Council Tax and Utility Accounts
We will arrange for the transfer of Council Tax and utility accounts to the Tenant. Meter readings will be taken, allowing your closing gas and electricity accounts to be drawn up. All these matters we will handle for you, however British Telecom will require instructions directly from both the Landlord and the Tenant.
When resident in the UK, it is entirely the Landlords responsibility to inform the Revenue & Customs of rental income received, and to pay any tax due. Where the Landlord is resident outside the UK during a tenancy, he will require an exemption certificate from the Revenue & Customs before he can receive rental balances without deduction of tax. Where we are managing the property we will provide advice and assistance on applying for such exemption.
It is most important that an inventory of contents and schedule of condition be prepared, in order to avoid misunderstanding or dispute at the end of a tenancy. Without such safeguards, it will be impossible for the Landlord to prove any loss, damage, or significant deterioration of the property or contents. In order to provide a complete Service, we will if required arrange for a member of staff to prepare an inventory and schedule of condition, at the cost quoted in our Agency Agreement.
What is an Assured Shorthold Tenancy (AST)?
Most tenancies will automatically be Assured Shorthold Tenancies (ASTs), provided the rent is under ?100,000 a year and the property is let to private individuals. Tenancies are usually granted for an initial fixed term of either 6 to 12 months. When the fixed term has expired the landlord is able to regain possession of the property provided he gives two months written notice to the tenant.