What is vacant property management?

Vacant property management is for property owners who need assistance with the running of their home, and who spend time away from their property.

Many of property owners enjoy the reassurance that their property is being well cared for while they are away, and is also ready for them when they arrive back, without incurring the significant costs of engaging a full-time housekeeper.

Vacant property management is the perfect solution for property owners who need assistance with the running of their home, and who spend time away from their property.

Vacant property management ensures that property owners enjoy the reassurance that their property is being well cared for while they are away. Also, that it’s ready for them when they arrive back, without incurring the significant costs of engaging a full-time housekeeper.

Property Inspection Checklist

What does vacant property management include:

Carrying out 2 weekly inspections on your property

  • Ensuring you are compliant with your insurers, a vacant property manager reports back to you regularly. Eventually, they fix any problems as they may arise.
  • Check central heating and cooling systems are fully functional and protecting the property against the elements and severe weather conditions.
  • Check security systems are fully operational and there are no signs of tampering.
  • Inspect the external areas to ensure the site is secure with no signs of break-ins or vandalism.
  • Provide regular reporting submitted to you, the property owner.

What are your fire safety responsibilities?

24-hour emergency response service and key holding service

  • This works for access day or night in case of any emergencies. Also, it’s needed for maintenance works required outside of normal working hours.
  • Liaise with the neighbours, Building Manager or Police. So, they have our contact should they notice anything out of the ordinary in between our visits.
  • Have a dedicated out of hours department covering emergency call-outs during evenings, weekends and Bank Holiday periods.

Landlord Insurance Explained

Access to trusted contractor network

  • A vacant property management agent works with carefully selected, reliable and cost-effective suppliers. Also, they arrange on your behalf contractor and engineer visits, such as plumbers, electricians, cleaners.
  • A vacant property management agent also deals with all usual Property Management related matters as they arise

4 things to do before hiring a contractor

Acting as your point of contact 

  • Collecting and forwarding mail, paying bills, liaising with utility suppliers and ensuring that any service charges are made on time.
  • Manage postal redirection or scan important correspondence direct to you
  • Take regular meter readings

How to be an effective property manager?

There’s no place like home 

  • A vacant property management agent makes sure when you arrive back your home is ready and waiting for you – exactly as you’d like it.

Vacant property management also includes property refurbishment/furnishing and housekeeping services.

A vacant property can sometimes be a vulnerable property.

So, whether you are currently trying to sell, are working abroad for a few months or not intending to return to your home for a while, a Vacant Property Management Service can work for you.

Vacant property management agents act as key holders and will visit your property regularly to carry out routine checks.

What is West London Property Networking

Please contact Pelin Martin to book a 30-minute free property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk

Expenses you can offset against tax as a landlord

It is important to understand latest tax changes. What are the expenses you can offset against tax?

Before claiming an expense, you need to make sure it meets a number of qualifying criteria, including the following:

The expense must be ‘wholly and exclusively for the purposes of renting out the property’.
The expense must be revenue, rather than a capital expense.
The expense for replacing items must be for a like-for-like replacement, not an improvement.

The most common types of expenses you can deduct are:

This is for the everyday repairs of a property.
This covers painting and redecorating between tenancies, replacing carpets and updating kitchens and bathrooms.
Advertising for tenants. This covers fees incurred in finding new tenants.
Management expenses
Insurance

It is important to understand latest tax changes. What are the expenses you can offset against tax?

Before claiming an expense, you need to make sure it meets a number of qualifying criteria, including the following:

  • The expense must be ‘wholly and exclusively for the purposes of renting out the property’.
  • The expense must be revenue, rather than a capital expense.
  • The expense for replacing items must be for a like-for-like replacement, not an improvement.

 

The most common types of expenses you can deduct are:

 

  • This is for the everyday repairs of a property.
  • This covers painting and redecorating between tenancies, replacing carpets and updating kitchens and bathrooms.
  • Advertising for tenants. This covers fees incurred in finding new tenants.
  • Management expenses
  • Insurance

Section 24 Income tax changes

The biggest mistakes landlords make

HMRC has a list of points that will be checked on the landlord tax return, so make sure accounts and returns comply to minimise the chance of a costly and time-consuming tax enquiry.

What are the common landlord pitfalls?

Know the distinction between capital and revenue expense

Capital works on rented properties, such as extensions or a remodelled bathroom, cannot be offset against tax because these kinds of works fall into the category of capital expense, rather than revenue expense.

Unexpected costs of being a landlord

You need to divide your rental income equally as a married couple

If the property is in joint ownership, some married couples make the mistake of dividing the income so that the partner in the lower-income tax bracket takes the lion’s share of the income.

If you buy a run-down property and spend money on essential repairs with the intention of letting it, you cannot offset this against tax. Where expenditure is incurred prior to the start of renting the property, it is not an allowable expense.

what are the tax implications of being a landlord?

Capital gains tax

In light of the recent tax changes many landlords have said they will be selling some or all of their properties. If that includes you, check capital gains tax has been appropriately calculated.

How to ensure buy to let success?

What changes are on the way?

Landlords will only be able to claim tax relief on 75 percent of their mortgage interest from 6 April 2018. You will receive a 20 percent tax credit on the rest of your mortgage interest payments. Mortgage relief is gradually being phased out, so from the following year the relief will only be available on half of the interest.

 

From the 2020/21 tax year, mortgage interest tax relief will be replaced by a tax credit limited to the basic rate of tax (20 percent). For a higher-rate taxpayer, the tax credit is roughly half as generous.

 

But the change could prove more punishing still, as it forces landlords to declare a higher income – potentially pushing landlords into a higher tax bracket. This threatens to wipe out profits for higher-rate taxpayers, and could mean some basic-rate taxpayers are also pushed into the higher band.

 

What is West London Property Networking

Please contact Pelin Martin to book a 30-minute free property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk

Property Inspection Checklist

There is absolutely no limit to what you can check during a property inspection, but make sure you do not impose on your tenant`s privacy.  Therefore, focus on having a good relationship with your tenant while going through the property inspection.

This kind of home inspection helps you identify issues before they become a major problem, and understand if your property is being looked after.
Remember: you must give tenants at least 24 hours of notice before visiting the property, and mutually agree the time.

This Property Inspection Checklist is a guide.

When in doubt, please speak with a legal expert.

Landlord safety inspection checklist:

There are certain things landlords must maintain during a tenancy to rent a property legally.

Check that the following safety tools are working properly:

  • Smoke alarms on each floor of the property (Read more: What are your fire safety responsibilities?)
  • Carbon monoxide detectors in any room with fuel-burning devices
  • Adequate provisions for heating, water, and electricity
  • Access to escape routes at all times
  • Electrical fittings and appliances provided by the landlord are safe to use.

Illegal activity and breach of tenancy agreement:

It’s important to check your property isn’t being used for any illegal purpose, and tenants are keeping up with their responsibilities in the tenancy agreement.

Check for the evidence of:

  • Farming illegal substances (Read more: How to find good tenants?)
  • An excessive number of visitors
  • Subletting or unauthorised occupation, such as excessive belongings or mail
    addressed to anyone other than current or previous tenants
  • Unauthorised pets, such as animal hair, paraphernalia, and smells
  • Smoking, such as ashtrays, cigarette butts, smoke, and nicotine-stained walls

Landlord health and sanitation checklist

The property should be free from health hazards and enable tenants to live there comfortably.

  • Plumbing is adequate and there are no leakages (Read more: How can you keep your tenants happy?)
  • Drains unblocked both internally and externally
  • There is no evidence of mould, particularly in-between grout lines and on windowsills
  • Working extractor fans and adequate ventilation
  • Evidence of pests and infestation, such as droppings, holes and gnaw marks, dead bugs,
    and nests
  • Property cleaned to a reasonable domestic standard
  • Property free from hazardous debris
  • Any outside space reasonably maintained.

Residential tenancy condition report

During the property inspection, keep an eye out for any damage, deterioration, or faulty equipment. This will vary depending on your property.

Check that the following elements are adequately maintained:

  • Doors and windows open and lock properly (Read more: How to ensure buy to let success?)
  • Floors and floor coverings
  • Furniture provided by the landlord
  • Walls
  • Tenants did not do any unauthorised decoration
  • Handrails are fitted securely
  • If there’s a loft or attic, give them a glance, too.

What is West London Property Networking

Please contact Pelin Martin to book a 30-minute free property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk

Section 24 of income tax act for UK landlords: further details of the implementation

Government is gradually phasing out the 100 percent tax relief on mortgage interest and other finance costs that landlords previously enjoyed.
What’s changing?

Between April 2017 and April 2020, the 100 percent tax relief on mortgage interest will fall to 75 percent, then 50 percent, then 25 percent and finally zero. When the relief hits zero, it will be replaced with a 20 percent tax credit that is applied to the taxable profits that landlords make on their properties.

The UK Government has released further details of the implementation of Section 24 of income tax act.

Section 24 is gradually phasing out the 100 per cent tax relief on mortgage interest and other finance costs that landlords previously enjoyed.

What’s changing?

Between April 2017 and April 2020, the 100 per cent tax relief on mortgage interest will fall to 75 per cent. Then it will be 50 per cent, then 25 per cent and finally zero. When the relief hits zero, it will be replaced with a 20 per cent tax credit that is applied to the taxable profits that landlords make on their properties. (Read more: What are the common landlord pitfalls?)

Who will it affect?

  • Landlords who are in the higher and additional rate tax brackets
  • because they are in employment,
  • have a very profitable property business
  • or earn income from other sources,

All these will suffer the most as it is the end of their 40-45% tax relief.

Basic taxpayers may also be affected: as those with income close to the threshold, could find that they have been dragged into the higher-rate tax bracket as a result.

Landlords who are likely to get the biggest surprise, however, are those who have no knowledge at all of the changes that came in with Section 24 of the Finance Act 2015 as many landlords were unaware of Section 24 and what it would mean for their rental profits.

Many buy-to-let landlords have heavy costs and these changes mean they will be at a loss every month. (Read more: Unexpected costs of being a landlord)

What are some landlords doing reduce the effects?

Some landlords are selling their properties with the lowest yields as part of a strategy to reduce their losses. Many landlords are looking to the opportunity to reduce their property portfolio throughout 2018. (Read more: Section 21 and section 8 notices)

Setting up a company to reduce the impact

One way landlords can potentially reduce the impact of the Section 24 clauses is by setting up a company and transferring the ownership of their properties to the company.

Transferring property interests into a limited company could be a way for landlords to ease their tax burden because it is not so straightforward for them to draw capital from the company in the future. It also comes with the burden of more reporting paperwork, such as the preparation of annual accounts.

The reality is that it is still early days in terms of assessing the impact of the Section 24 changes on landlords’ behaviour and the rental market generally. (Read more:  How to ensure buy to let success?)

What’s the future view?

The average buy-to-let property would be £850 per year less profitable once the Section 24 policy is fully implemented. Landlords will claw back 50 per cent of that loss through rent rises. There could be an increase in the rents of seven per cent nationally over four years – the equivalent of £250 a year. The report also estimates that buy-to-let-backed private-rented-sector stock could fall by 46,000 properties by 2020/21. Landlords would be leveraged by almost £8bn. Ultimately, it might not be landlords who get the biggest shock from Section 24, but the UK economy as a whole.

What is West London Property Networking

Please contact Pelin Martin to book a 30-minute free property consultation on +0208 994 7327 – pm@bluecrystallondon.co.uk