From the outside, owning an investment property can seem like a really great idea – but what do people really know about the pitfalls of being a landlord?
It’s fairly common for people to assume that being a landlord is a fairly simple process. You find a nice tenant, move them in, deal with a couple of legal bits and get sent rent each month – simple; right? It probably should be that simple, but in real terms most landlords will tell you completely the opposite.
Having a rental income can of course provide a good financial return and when everything goes smoothly can give you security and comfort for the future. However, the ever changing regulations and taxation can add a huge amount of stress to what was once a simple way to make a few extra pounds.
Before, I started to work in the industry the whole rental process with pretty straight forward. As long as you had your annual gas safety check there wasn’t much else, by law, that you were required to do. Tenant’s deposits could be held by the landlords in their own bank account and other than carrying out a few checks and getting a tenancy agreement, you were good to go. This meant that the need to use a professional letting agent was minimal. Landlords could source their own tenant via sites like Gumtree or even before via Loot and have very little trouble in setting up a successful tenancy. This has become progressively more difficult over the years due to the constant changes in regulations and the need for more in depth tenancy agreements. As a result it is now almost second nature for landlords to turn to a professional agent to take over the complexity and as the House of Commons is looking to provide tenants with even more rights then the situation may be becoming even more complicated.
There are many changes you may be aware of like the fact you are no longer allowed to hold on to the tenants deposits, properties need to have an energy assessment prior to being marketed and non-resident tax forms have to completed for overseas landlords. There are also a mass of lesser known regulations like the recent change on the installation of smoke & carbon monoxide alarms and the pending regulation on electrical safety checks and the up and coming changes in UK taxation for Landlords
It’s no secret that Letting Agents can get a bad name for poor service and being a bit of a ‘Jack the lad’ type role. However, the professional Letting Agents amongst us will agree with me when I say it takes a huge amount of time and effort ensuring we are correctly informed on all the latest changes and the pending changes for the future. This then enables us to correctly inform our landlords and provide a service worth paying for – something that isn’t always the case.