Six benefits of being a landlord
- September 07, 2016
- Digital Marketing Agency
Deciding to rent your property out can be an emotional decision, especially if it’s a family home that you have lived in yourself. At this time, you will probably be weighing up the pros and cons of selling versus letting your house out so to help you make a decision, below are six benefits that being a landlord can bring.
Top of the list of the benefits that being a landlord can bring is of course the income it generates. The money you acquire from the monthly rent can help to pay off the mortgage on that property, a second property or can even be used as a boost to your monthly income.
The property will continue to increase in value
An advantage of holding onto a property for as long as possible is that it’s almost guaranteed to continue to go up in value. The market does of course fluctuate but generally, as long as you sell at a good time you should make a substantial profit.
It’s a low-risk investment
You’re taking a risk with anything you decide to invest in but stocks and shares can fall dramatically or even disintegrate entirely. Property is far less volatile and providing you keep up with your mortgage repayments, this is an investment that you will never lose.
Whenever it comes to tax affairs it’s always recommended that you speak to a qualified accountant. There are however a number of long and short-term tax advantages of being a landlord.
Although any rental income you generate is taxable, you can deduct a lot of the expenses which are associated with owning or maintaining the property. You can also depreciate your property over time which means that you can recover your costs through yearly tax deductions when you submit your annual tax return.
There’s growing demand for rental properties
Because house prices are so high across the UK, it means that it’s taking people longer to get onto the property ladder than ever before. The result of this is that there is a huge demand for rental properties so you can be rest assured that’s it’s highly unlikely that you will ever struggle to rent your flat or house out.
Because of an increase in demand, another benefit to landlords is that the cost of renting has gone up substantially in recent years. The latest HomeLet Rental Index shows that the average UK rental value is now £913pcm – a 3.1% increase compared to this time last year. Furthermore, average rental values have increased in 11 out of 12 regions across the UK over the last 12 months.
Everyone worries about their future and with so many questions surrounding the state pension, we’re more concerned about how we’re going to fund our retirement than ever before. Being a landlord means that you have two options for when you do decide to retire:
- You can carry on renting out your property and live off the income you generate from this
- You can sell the property and have a substantial lump sum to add to your retirement fund
As you approach retirement, it’s wise to stick to low-risk investments to ensure that your cash doesn’t disappear when you’re relying on it the most.