Establishing yourself as a landlord can be a highly profitable enterprise. If you’re fortunate enough to have a property available to rent out, this can be a major supplementary source of income and can enable you to finance other projects, such as starting your own business. However, being a landlord isn’t just about receiving money at the end of each month. Landlords have legal responsibilities and there are financial costs involved.
Paying Tax
When you start renting out a property, it’s essential that you inform HM Revenue and Customs. If you don’t report your rental income to HMRC and pay the required tax on it, you will be charged with a penalty. Remember that if your income from the property rental is more than £2,500 per year, you should disclose this on your property assessment tax return. If your income from the property is less than £2,500 per year, it’s recommended that you call the property assessment helpline and ask for a P810 form. If you have further questions about Property Condition Assessment, make sure to consult with a property assessment agency to learn more.
Insurance
A standard insurance policy will not be sufficient for a property that you intend to rent out, even if it is your former home. There are specialist landlords’ insurance policies available from a variety of providers, including Click4quote Ltd. The contents of the house or flat that you have provided for the tenant should be insured against wilful or accidental damage and theft. It’s important to keep in touch with your tenants, and encourage them to report breakages immediately, so that items can be replaced or repaired. There are plenty of competitive policies that aren’t much more expensive than a standard insurance package, and there are specially tailored policies to cover professional tenants, students and those who receive DSS.
Gas, Electrical and Fire Safety
It’s very important that all the items and appliances that you provide in the rental property are safe and fit for purpose. If the tenant becomes injured due to poorly maintained or faulty electrical goods and furnishings, you will be held liable and may face criminal charges. All soft furnishings should comply with the Furniture and Furnishings Fire Safety Regulations, and gas checks should be carried out on a property annually, or before a new tenant moves in. All gas and electrical appliances should be maintained to a high standard and safety notices and operating instructions supplied to the tenant before the letting commences. Regular electrical safety checks should be undertaken by a qualified electrician who has completed electrical training courses in an electrician trade school.
