If you have an extra property, then you will know how much potential there is in renting. With that said, you do need to make sure that you’re not falling into the same traps that so many do. This is the worst way for you to manage your finances, and you may also find that it’s the fastest way for you to sink your investment. If you want to help yourself, then all you have to do is take a look below.
Work out Tax
The first thing you need to do is try to work out your tax. If you do intend to rent out your property, then you will need to report to the relevant tax authority. You also need to make sure that you take note of how much capital gains tax you have to pay as well. If you have to pay this, then you may find that letting your home out isn’t the best way for you to move forward from a financial perspective. It’s also important for you to try and work out how much tax you may be eligible for, as this is the best way for you to find out if you should rent or if you should take a different route, which could include selling up. Taking into account things like rent stabilisation can also help you here, as this will again affect your tenants, your income, and your bigger overall picture. If you want to help yourself, then this rent stabilization guide should help you with what you need.
Take out Rental Insurance
Taking out rental insurance is also a good way for you to try to protect your property and your assets. Your tenant will be advised to take out contents insurance as this is a good way for them to protect their assets, but at the end of the day, it’s a good idea for you to try to make sure that you are taking note of the things you can do to protect the property. It’s wise for you to look at your property as if you are seeing it for the first time here. At a minimum, you do need to make sure that you are seeing rooms that have to be decluttered and repainted. If you want to get a higher level of rent, then your agent can probably advise you here, but either way, it’s worth considering.
Take out Insurance
Taking out rental insurance is also a good way for you to protect your property. Your tenant will be asked to take out insurance for their items, but you do need to get rental insurance for the building as well as the contents you may have. If you can do this, then you will find it easier to get the result you need. Even if you do decide to go down the easier route and rent your property as unfurnished, you do need to make sure that you get the cover you need. If you don’t take the right policy for things, then you may find that you end up not being covered for things like accidental damage, which is a huge mistake. You may find that as long as your tenant passes any references, you are eligible for landlord legal protection, as tenants can often experience financial hardship that prevents them from paying their rent. If this is the case, then taking out this could be a good way for you to protect your rent.
Safety Tests
It’s a legal requirement for you to make sure that your home is safe. If your home has asbestos or anything else of the sort, then it is so important that you take the time to remove this, and that you also make sure that you are dealing with any electrical hazards that may be present. If you can do this now, then you will find that it is easier for you to make sure that your property is in the best shape possible moving forward, and that you can also make sure that you are not putting your tenants at risk unnecessarily. Safety tests are also required, as this helps you to ensure that the right checks have been carried out, and that you can make sure that your tenants are safe. Smaller things like having a gas safe engineer come round are important, but at the same time, having an annual boiler service done as well as a fixed wiring and electrical safety test will also help you quite a lot. Portable appliance tests can also be done, as again, this is a great way for you to make sure that you are not only keeping your home safe, but that you are also looking out for your tenants, which is the biggest thing of all.
Legal Obligations
You also need to follow a series of legal obligations. It may be that you have to get an energy performance certificate, or that you also make sure that you document what you can do to try to improve your property overall. If you improve your property, then this will help you to get bigger and higher-paying tenants, for example, which will help you move forward. Things like this can make a big difference to you, and you would be surprised at how much it could help you to not only feel secure in your home but also make sure that you are not missing out on anything that could help you to attract tenants.
So as you can see, renting a residential property isn’t a bad idea, and you may even find that as time goes on, you end up making a lot of money from it. With that said, it’s wise to assess your options and to also make sure that you’re not overlooking some of the mistakes that many people make. It’s also a good idea for you to seek financial advice if you feel as though this would benefit you, so keep that in mind.
