You could be sitting on a goldmine. Really. If you own a house in London, you could make a bundle in monthly rental income. Think of that extra money. Think of the added security. Think of adding ‘Landlord’ to your list of titles and talents.
Rental prices in London may have taken an uncharacteristic dip recently, but the rental market is still one of the surest investment options out there. And, in these turbulent times, a sure option should be grabbed with both hands.
At Peach Properties, we know an amazing property when we see one. We have a growing portfolio of properties in East London and, with a specialist knowledge of this area, we could help find you the perfect tenants quicker than you can say “disposable income”.
If you’re thinking of either upsizing or downsizing and renting out your current home, there are a few things you should consider:
1. Are you just temporarily vacating your home?
Maybe your job is taking you overseas for a two-year contract. Maybe you finally want to take that adventure-laden gap year and travel the world. Whatever the reason, if you are vacating your home and renting it out, but plan to return within six years, you can avoid capital gains tax when you finally sell. This is called the Six Year Rule.
2. Have you considered all the finances carefully?
Renting out your home may seem like ‘free money’ but there is a degree of pay-out involved before the good times start rolling. Depending on the area, you may need to get a licence to turn your residential property into a rental property. This is to ensure that basic standards of safety (encompassing electrical, heating and fire exits) are met. As a landlord, you will also be required to make regular aesthetic and functional upgrades to the property. Your taxes for a rental property will be handled differently. You will be entitled to a number of deductions. Utilities, homeowner association fees, repairs to the house, insurance, property taxes, mortgage interest and more can be deducted each year.
3. Is your house in an area that would do well on the rental market?
For some locations in London, it might make more financial sense to sell the property. But areas in Zone 1, 2 and 3 do very well on the rental market.
4. Who do you want your property to be rented to?
Figuring out who you’re targeting will help you to establish what you should be charging. Do you want students? Young professionals? Families? Don’t worry, at Peach Properties we can help to ease the burden of this necessary legwork.
To talk to one of our talented, expert and all-round amazing representatives call, 020 7739 6969. We’ll give you the lowdown on turning your home into a business and give you sound advice on what your next step should be. We’ll also share some of our favourite London coffee spots. Because we’re nice like that.
If you’d like to see our latest Shoreditch pads, click here.