Wednesday, 9 May 2018

Legal Q&A:what do we need to consider before we invest in a buy-to-let property?

Question: We have some savings and my wife wants us to get a buy-to-let property as she feels it would provide a good pension for us. We know very little about property — having lived in the same house we bought 37 years ago — and even less about investment property. Do you have any pointers for us?
Answer: Consider how much of your savings you can afford to spend on the property and where it should be located. Decide whether you want a flat or a house. Ensure there are no restrictive covenants banning letting, or restricting the way the property may be let.
Decide whether you wish to undertake holiday letting or have more long-term tenants, and if you wish to let the place furnished or unfurnished. You should also consider the energy performance of any property as you have to provide that information when letting. A written tenancy agreement will be needed, and there are strict requirements for protecting tenants’ deposits.
The property will need to be maintained and various legal requirements for letting will need to be satisfied — for example, the provision of a Gas Safe Certificate and checking the identity of any prospective tenant, to verify their immigration status.
If the property increases in value, then capital gains tax may be payable, as the property will not be your principal private residence. Income tax may be payable on the rent you receive. And remember that you may have void periods when you have no tenants and therefore no rental income.Budget carefully, taking into account the particular expenses you will face. These include the additional stamp duty that will apply to an investment property; surveyor’s fees; legal fees and the cost of furniture if you decide to let the place furnished. Consider discussing your options with a good letting agent and your solicitor.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor

No comments:

Post a Comment