Tue 05 Sep 2023
Have you Inherited a Property in Leicestershire ?
Have you recently come into possession of a property in Leicestershire, whether through inheritance, a move, or a change in your living situation? Perhaps you've found yourself unintentionally becoming a Landlord. While owning a rental property can provide an extra source of income and potential long-term value, it can also be a complex and challenging endeavor, especially for those unacquainted with the intricacies of the letting industry.
Navigating the World of Landlord Responsibilities
The letting industry is governed by more than 150 laws and regulations, which can be overwhelming for newcomers. Ignorance of these laws is not an excuse, so it's crucial to (a) familiarise yourself with your obligations and (b) be prepared to invest in necessary property improvements to ensure legal compliance. Beyond the risk of inadvertently breaking the law, inadequate health and safety measures can jeopardise your tenants' well-being.
Furthermore, if you're not well-versed in financial investments, you might not be optimizing the tax-efficient strategies for owning and profiting from an investment property. This could result in incorrect tax filings and substantial future bills. Failing to account for the expenses associated with maintaining a Buy to Let property in your budget could lead to financial struggles down the road.
Here are the essential steps to ensure that your unexpected role as a landlord in Leicestershire enhances your financial situation and keeps you in good standing with local authorities:
1. Seek Guidance from Financial and Property Tax Experts
As soon as you realise you're about to own a property for rental purposes, consult with financial advisors and property tax specialists. They can provide invaluable advice on the best ownership structure to maximize rental income and equity growth. Legal guidance is also essential, particularly if you plan to pass on the property to family members.
2. Engage a Buy to Let Mortgage Specialist
Properly structuring the mortgage on your property is critical. If the property was previously your residence with a residential mortgage, inform your lender of the change in use to secure a buy to let mortgage. It's crucial to work with a specialized mortgage broker who can evaluate your existing mortgage and explore the market for the best-suited options, which may involve switching lenders.
Even if your property is mortgage-free, consider seeking financial advice to determine if taking out a mortgage and releasing some equity would be advantageous. If the potential rental income significantly exceeds the mortgage payments, you might find better opportunities to invest your capital elsewhere.
For further assistance, get in touch with our financial services.
3. Utilise a Reputable Local Letting Agent
Some may view all letting agents as interchangeable and their fees as unnecessary expenses. In reality, choosing the right agent can prove to be a wise investment. The cost of their services is not only tax-deductible but should also offer excellent value for money.
A responsible letting and managing agent, like us at Sinclair Estate Agents, holds membership in professional industry bodies such as ARLA or RICS (as we do). This ensures proper training, adherence to a code of conduct, and protection of your finances through Client Money Protection insurance. Importantly, we stay updated with the latest legislation, ensuring that your property is legally compliant and up to the highest industry standards.
While it's possible to manage a property on your own, the constant influx of new regulations and upcoming industry-wide regulation makes this increasingly risky, especially if you own multiple properties. Balancing these responsibilities alongside a full-time job can be daunting. Investing in the expertise of professionals who can handle legal and administrative obligations can save you time, money, and stress.
So, if you find yourself unexpectedly stepping into the role of a landlord in Leicestershire, remember that there are experts and services available to help you navigate the complexities and ensure your property investment becomes a valuable asset for your financial future.