2ND APRIL 2019
The pro’s and cons of being a landlord.
Is it fair to say that being a landlord often seems Profitable? Lucrative? A desirable opportunity?
We have looked at a list of realistic pro’s and cons, for and against becoming a landlord.
Security & Additional Income
This type of pro is perhaps the most obvious and the part potential landlords are the most drawn to, of course! A rental property can provide an ongoing income which can be used as savings, pension or even reinvested. On the basis you have found reliable tenants who pay their rent on time, then each month you will receive a sum of money that will undoubtedly cover your mortgage repayments on the property.
The longer the rental term, the more chance value on the property will increase leading to a longer term investment and profitable gain.
Investing in a property gives you flexibility in how you manage it. You can decide how much to invest in redecoration, what type of tenancy you would like, length of tenancy terms and sell when you feel necessary!
All rental income is tax deductible and buy to let mortgages tend to be at a higher rate, however there are some options available in the form of expenses that can help the issue of tax deductions for example;
• Professional Services
• Building & contents insurances
• Replacing damaged furniture & furnishings
• Depreciation in the form of wear & tear
Sadly just securing yourself a rental property to let isn’t where the financial outgoings end. Whilst several areas are tax deductible as mentioned above, there are also aspects of renting expenditure that are not. Common costs include;
• Landlord Insurance
• Repairs & Maintenance
• Safety Inspections (Legal requirement)
• Furniture & Decorations
Being a landlord can be very time consuming. There is always the risk of rogue tenants who fall into arrears or allow a property to fall into disrepair, leading to further time spent and additional costs incurred. Sourcing contractors, dealing with emergencies etc.
It can be a long drawn out process if you need to proceed down the legal route with a tenant. Most common reasons is due to unpaid rent, damages to the property or repossession. This is not only time consuming but highly stressful and frustrating, often leaving landlords at a financial loss.
What we recommend
Full comprehensive landlord insurance – Just to cover all bases!
Rent and Legal protection – Got to keep that rental income coming in no matter the circumstance
Invest in trustworthy & reliable letting agents – These people are the professionals there to guide, assist and support throughout your landlord journey.