Anyone who rents out a house or a room is a landlord and while most landlords in Newcastle may only own one or two properties they still have responsibilities.
What do I need to think about
When you decide to rent out a property you first thought is probably to find a tenant but before you get to that stage you need to think about:
- Property size, type, location and market demand;
- Managing your property;
- Repairs, maintenance and other expenses;
- Problem tenants or unpaid rent;
- Finance, mortgages, tax and insurance.
The right knowledge and skills are important if you are to be a successful landlord and it’s always worth getting advice from people who have more experience than you.
You could talk to local estate agents about the demand for rented property or get in touch with the Private Rented Service Newcastle for advice, support and training and access to the Newcastle Landlord’s Forum.
Who should manage my property
Managing a property can be time consuming and hard work but if you prefer to employ an agent instead but it’s important to choose carefully. You should think about:
- How much they will charge;
- The level of service you want;
- What the agent is responsible for;
- Rent and deposit protection;
- Testimonials from existing clients; and
- How to end the contract when you no longer need their services.
Do I need insurance?
Standard home insurance does not provide adequate cover and you must take out landlord insurance to protect you and your property. While tenants are responsible for their own possessions you need to protect the building and any furniture or other contents you provide. You might also want to think about taking out cover to protect you if the tenant doesn’t pay their rent or moves out without notice.
Are there any financial implications?
If you already own the property and have a mortgage or you are not the freeholder then you will need to get permission before renting the property to a tenant.
If you’re thinking of buying a property to rent it’s always advisable to get independent advice. You can find out more on the Council of Mortgage Lenders website.
What about Tax
Council tax and income tax are the types of tax you are most likely to have to deal with when you become a landlord.
The tenant is usually responsible for the council tax once a property is let but this may not be the case for shared houses or student lettings so make sure to include this in your Tenancy Agreement.
As with any income you could be liable to pay tax on the rent you receive so it’s worth talking to an accountant or a tax adviser before submitting your tax returns.
Other taxes you may need to consider include VAT, Capital Gains Tax, Stamp Duty and Inheritance Tax.