Landlord Fees You Need to Know About
Stepping up to manage the properties as a landlord can be a daunting task and can come with a number of responsibilities and fees involved. Read below to find out the landlord fees you need to know about.
Legal costs are a basic minimum requirement for your property being eligible for occupation. Electrical Safety Inspection Report, Gas Safety Certificate and Smoke & Carbon Monoxide System Inspections and having a certified Energy performance certificate are legal necessary costs that involve a specialist assessing the properties for any faults or hazards.
As with all tenancies, property maintenance is an expectation with all rentals. Maintenance and repairs can include almost any possible fault from damaged floorboards to leaking pipes. Excluding repairs, maintenance cost tends to be most faults and breakages regarding plumbing and electrics. Once these problems arise, consulting a specialist is advised from a health and safety point and interest for the best performance and diagnostic. Incidents that require a specialist will always require paid fees and are decided heavily by the scale of the job.
Similar to maintenance, repairs are also expected to be catered for. Repairs also can range from a large list of possibilities, such as chipped or damaged walls, broken hinges on doors, loose or poorly fit skirting boards and broken windows. These possibilities always have a likely chance to eventually form, so being flexible for your tenants and knowing basic DIY can help you reduce your cost in yearly repairs around the property.
Landlord specific insurances depend upon your requirements when considering potential risks property renting may hold. Before deciding on what type of insurance you need, it's best to assess your options and determine the biggest risk. However, it is advised that most landlords seek insurance for their properties, contents, liability and loss of rent.
Income tax is required when starting any business in the UK. Due to property renting and landlords being considered a profiteering business, income tax will be expected for any landlord letting out their property. The income tax rate percentage depends upon how much rental income property investors make from their rented properties.
Letting agent fees tend to be the most common services landlords are required to pay for. For most properties, this typically includes processes like reference checks, suitable tenant searching and property management. However, the benefits and opportunities available can vary depending upon the agent's services such as a property management service or a tenant finding service.
As of 2021, landlords can no longer deduct mortgage interest from rental income to help reduce tax. Landlords now receive a tax credit based on 20% of the interest element of your mortgage payments. This change could affect how much more or less you pay after-tax than you might have prior.
Renovating and Redecorating
If you have recently purchased a new or old property, renovations could be needed before you put your property on the marketing. Due to housing standards in 2021, it may be cheaper to fully redecorate and renovate slightly older properties up to modern standards in some scenarios instead of buying a newly built property. In either situation, redecorating and renovation can be a lengthy and expensive task. These fees can include hiring a decorating firm, alongside the costs of any necessary supplies such as wallpaper and paint.
Although the property industry can be daunting, we hope that we provided a clearer insight into the fees you can expect when tackling the responsibilities of a landlord and the anticipated expectations from not only the government but your future tenants. Find out how AJ Properties can help you manage your landlord fees and responsibilities by getting in touch with us here.