5 Surprising Expenses new Landlords have to Deal with
Letting out the property is considered an easy and convenient way of earning income. But it is important to understand that there is much more to being a landlord than simply finding tenants and collecting rent. People think that there are no hidden costs involved when you are letting a property so they are often blind-sided by the expenses that they need to take care of.
Here are a few expenses that the landlords have to pay so that they can become a successful landlord.
Paying the Letting Agent Fee:
If you want to become a landlord then you need to find tenants and it is a competitive business so it is not easy to find the tenants. The best way of earning good money through letting property is to use the letting agents to find the tenants that are able to pay the rent that you want. There are two levels of services that you can take advantage of. The basic service helps in finding the tenant and the services include credit checks, interviewing and advertising. If you use the full management services then you will be able to get a service that helps in finding tenants, collect money, paying bills and managing the property.
You will not be able to attract the tenants of your property is in bad shape. It is essential that you keep the property in perfect condition. You will have to invest money in upgrades and repairs so that you can keep the property in an attractive condition. You need to categorize the upgrades so that you can invest in the right ones at the right time. You should always look to enhance the value of the property so that it can stand out from the competition. In the competitive real estate business, it is always good to have competitive edge.
The Safety Checks:
It is the responsibility of the landlords to make sure that the property is safe for the occupants so there should be landlord safety checks so that you can stop the prevent big problems like leaks, cracks, broken appliances and other costly issues. It is the legal obligation of the landlords to do yearly gas and electrical safety checks.
When you are letting the property you should not rely on domestic insurance because it does not cover all the risks that come with landlord insurance policy. When you are letting the property you need to get a specialist cover so that all the safety risks of a rented property are covered.
The Income Tax:
You should know that the profit you earn is subjected to tax. But the money that is spent on the maintenance and management of the property goes under the category of expenses and is not subjected to tax. Make sure that you keep all the receipts of the work done on the property safe o that you have proof of your expenses. It is always better to get the taxes done by an accountant so the chances of error are zero but hiring an accountant is also an upfront cost you need to consider.