Do you have an empty property in Bromley or the surrounding area? You may be thinking about letting it out but are still determining the benefits. Well, we can confirm that they can be substantial!
Income from letting your property
The first, and arguably the most obvious, benefit of letting out your property is income. While house prices have climbed consistently over the years, so has the cost of rent. Suppose you have a property that is currently standing empty. In that case, it is effectively losing money and could be providing a home for someone. When you let out your property, you make money on the rent.
One thing to consider, though, is the rent price isn't necessarily the end figure, and there may be fees to pay, upkeep to pay out, and even mortgages to cover. However, a passive income earns you money, even if you do nothing.
Tax benefits
As well as making a steady income from rent, there are tax benefits associated with letting your property. The amount of tax relief you can claim depends on whether your property is classed as furnished or unfurnished and what type of residence it is. In addition, when you let out your property, you may be able to offset the costs and fees against that income.
Gain from capital appreciation
When investing in property, the old maxim remains true - buy low, sell high. By letting out a property rather than selling it, you can benefit from any potential growth in the property market. Over time, this can add up to a considerable value and be used as part of your pension pot.
Claiming expenses
When running a property business, you can often claim expenses for tax relief. Things you can claim for include:
- General maintenance and repairs,
- Water rates,
- Council tax,
- Gas & electricity,
- Service charges,
- Ground rent
- Landlord insurance
- Public liability insurance
- Services such as cleaners and gardeners,
- Advertising for new tenants,
- Letting agent fees,
- Management fees.
You can even claim some of the vehicle and mileage you use for the property. However, things such as home improvements cannot be claimed for. The best port of call would be to speak to us or an accountant for a complete list of allowable expenses.
Increased flexibility
Letting out a property can give you more flexibility. Rather than selling it and finding another home, you can keep it as an additional source of income or even move into the property yourself if you choose. This gives you a lot more control over your finances and future.
Even if you decide to go and live on a beach in Bali, if you rent your property in Bromley - you will have a steady income, even as you sip on that cocktail.
You can provide someone with a home
Let's remember that by letting out your property, you're providing someone with somewhere to live - no matter their circumstances. Renting your property is an excellent way to help those in need while also making a return on investment. This investment can be truly satisfying and beneficial to you and the tenant.
Manage your cashflow
Even if it's a family home, by moving out to pursue other ventures, you can let your property and enjoy the income it provides. This can be a great way to manage your cash flow if you need more savings or other investments. It also gives you more time to focus on other activities, such as travel or business ventures, while having a secure income from your rental property.
Things to consider if you're thinking about letting
Creating a successful property letting venture requires careful planning and research to ensure that the rental returns are sound. Taking the time to consider taxes, regulations, demands, and rules will help you make informed decisions when deciding whether or not it is the right step for you.
Finding reliable tenants who pay rent on time, take care of the property during their tenancy, and have good references is vital to getting the most from your investment. That's where engaging a letting agency such as David James can come into its own.
Finally, keeping up with maintenance costs and staying on top of any changes to tax laws or regulations will help protect your investment. It will also ensure that your financial rewards continue for years to come.
For more information, please get in touch with David James today. We are here to help you make the most of your property investments.