I reckon we all deserve a break from the daily Covid-19 press briefings, so here’s some light relief – a legal briefing for landlords! Who needs a streaming service when you can familarise yourself with what’s imminent or in the pipeline and what action you could / should be taking as a landlord?! 

Contrary to the general view, being a landlord is far more challenging than it looks from the outside. Maintaining your property, finding and keeping tenants are (relatively) easy tasks. It’s the legislation that really takes all your energy and focus. Hence this, our legal briefing for landlords.

Of course, everything has to be viewed through the lens of Covid-19 so, in many cases, the exact timings are not clear. Some will happen, some will be delayed – whatever, we think you should be aware of what’s coming down the line.

Mortgage interest tax relief

Detail: no legal briefing for landlords would be complete without an input from HMRC! In 2017/18 buy-to-let mortgage tax relief began its phased disappearance. Since April 2017, landlords’ finance costs have been slowly disallowed; instead we only receive a 20% tax credit on our allowable interest payments. From April 2020 landlords won’t be able to claim any tax relief on mortgage interest payments at all, meaning our ‘taxable income’ will be significantly higher than before and many of us will jump into a whole new tax bracket. 

Schedule: fully implemented from 06 April 2020

Action: this only impacts those being taxed at the higher rate, but many landlords with mortgages will be pushed into this tax bracket as a result of the changes. Check to see if you have been affected already, because this problem could get much, much worse for you from April 2020. Tax efficiencies, are always possible though.

Coronavirus Act 2020 and suspension of evictions

Detail: emergency legislation, preventing landlords from being able to start court proceedings to evict tenants for at least 3 months, has been passed. Luckily, property owners who are suffering financially could qualify for a 3 month mortgage holiday. This means landlords whose tenants aren’t paying all their rent could get some respite until the middle of June. After that point “landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances” (Robert Jenrick, Housing Secretary).

Schedule: as of 26 March 2020

Action: show compassion, but don’t cause a major debt problem for yourself. Carry on being ethical and law-abiding and take no notice of Shelter’s relentless trolling of landlords. Vous y trouverez des médicaments sans ordonnance, des dispositifs médicaux, du matériel médical, des articles de parapharmacie, des produits pour l’hygiène, des cosmétiques, produits diététiques et minceur, des articles pour bébé et pour les mamans, le tout parmi asgg.fr/ les plus grandes marques. If you chose to take our Rental Guarantee then you will be covered, but remember there’s a process to follow, otherwise no one benefits, so contact me if you’re unsure where you stand. See comprehensive guidance here.

Homes (Fitness for Human Habitation) Act 2018

Detail: protects tenants and ensures their property is fit for purpose. Affects all periodic tenancies in England, including those that existed before 20 March 2019. The only exceptions are tenancies on a fixed term that begun before 20 March 2019, to which the act won’t apply until the end of the fixed term. Replaces existing fitness for human habitation clauses in the Landlord and Tenant Act 1985, and applies to all human habitation tenancies with a term of up to seven years.

Schedule: 20 March 2020

Action: make sure your property is compliant.

Minimum energy efficiency standards

Detail: an energy performance certificate (EPC) rating of E or above is required for new tenancy agreements and renewals, other than some HMOs, e.g. bedsits, listed buildings, etc. See also Minimum Energy Efficiency Standards – MEES – which came into effect in April 2018.

Schedule: 1 April 2020

Action: make sure your property has an EPC rating of E or above. If not, then implement measures to raise it above an E rating, or, if appropriate, apply for an exemption.

Principal Private Residence relief

Detail: changes to Principal Private Residence (PPR) relief mean that landlords will lose 9 months’ worth of Capital Gains Tax (CGT) relief when they come to sell. Currently, landlords can claim PPR relief for the whole time they lived in a property before they let it out, in addition to an extra 18 months after moving out. This final exemption period will be reduced to the time they lived in the property plus just 9 months.

Schedule: 6 April 2020

Action: seek other opportunities to remain tax efficient!

Lettings relief

Detail: lettings relief applies to shelter part of the capital gain arising on the sale of let property that at some time was also the owner’s PPR. The amount of letting relief is currently the lowest of (a) the amount of PPR relief available on the disposal; (b) £40,000; or (c) the gain attributable to the letting. However, from 6 April 2020 lettings relief will only be available where at some point the landlord actually shared occupation with their tenant(s).

Schedule: 6 April 2020

Action: remember, there are other opportunities to remain tax efficient…

Capital gains tax payment deadline

Detail: the deadline for payment of CGT will no longer be from 31 January in the year after the tax year the landlord made the sale. From April 2020, it will be within 30 days of the completion of the sale.

Schedule: 6 April 2020

Action: within 30 days of completion of sale submit a provisional calculation of the gain to HMRC and pay the tax that is due. Any gain will still be recorded on your tax return and any over or under payment of tax dealt with at that point.

Brexit review 

Detail: as energies and attention are quite rightly being focused on the Coronavirus pandemic, both Britain and the EU are facing calls to back away from a “game of chicken” and extend the Brexit transition period immediately.

Schedule: June 2020 (planned)

Action: monitor the situation and follow existing rules (e.g. Right to Rent checks) until told otherwise.

Tenant Fees Act 2019 

Detail: the Tenant Fees Act, which came into force in England in June 2019, will be extended to cover all existing tenancies. This Act really will tie you up in knots if you aren’t vigilant and organised.

Schedule: 1 June 2020

Action: the Tenant Fees Act really tests the mettle of landlords, especially those who are self-managing. A dedicated legal briefing for landlords awaits!

Mandatory electrical safety checks  

Detail: landlords already have to make sure that the wiring and appliances in their properties are safe. However, from July 2020 it will be a legal requirement for private landlords to have their electrical installations inspected every five years and provide a safety certificate to tenants and their local authority upon request. The regulations will apply to all new tenancies from 1 July 2020 and existing tenancies from 1 April 2021.

Schedule: 1 July 2020

Action: don’t delay, July is not far away and electricians are already in short supply. Local authorities will take action if  landlords do not comply with the requirements and fines will be issued. Talk to us, we’ll help you schedule the work and avoid the pain.

Client money protection  

Detail: since April 2019 all agents who manage property lettings in England have been required to belong to an approved Client Money Protection scheme.

Schedule: 1 April 2021 (hard deadline, previously delayed)

Action: check that your agent is a member of a Client Money Protection scheme (we joined a scheme several years ago). Remember, if anything happens like going out of business, misappropriation of client funds, etc, it’s the landlord who feels the greater impact.

Renters’ Reform bill   

Detail: abolishes the use of Section 21 ‘no fault’ evictions and introduces a lifetime deposit, along with measures to expand the database of rogue landlords and letting agents. Apparently it “improves the possession process for landlords”, so we look forward to an improvement on the usual 16 weeks’ wait to get a hearing.

Schedule: subject to parliamentary time

Action: protect yourself with super-efficient management of your tenancy, such as great record-keeping, efficient processes in place (e.g. for non-payment of rent) and clear communication. If you have to serve a Section 8 (and have no desire to sell or move into the property itself), you’ll need a 100% watertight case so the judge has no reason not to grant your possession. Such evidence-gathering does not come naturally to many self-managing landlords!

Pet friendly tenancies

Detail: this revision of the Model Tenancy Agreement for Assured Shorthold Tenancies in the private rented sector is intended to make it easier for tenants with pets to find landlords who will accept them. It removes restrictions on responsible tenants with pets and encourages landlords who use the Model Tenancy Agreement to offer greater flexibility in their approach to pet ownership.

Schedule: no idea!

Action: notwithstanding any planned legislation or ‘movements’ in the pipeline, welcoming pet-owners makes good, commercial sense. It opens up a wider base of potential tenants who, in contrast, currently have a limited choice of properties from which to choose. Time to make your property pet-friendly!

Legislation never stops for landlords!

The private rented sector is a very busy section of the law. New legislation, amendments to existing and bolt-ons are appearing all the time. Stick with us – we’re always monitoring and scrutinising the legal landscape for private landlords. No doubt, we’ll be posting another legal briefing for landlords again very soon…

      

Profitability in the private rental sector hinges on a number of things, but achieving tax efficiency is a high priority. It’s the sensible and responsible decision. The right business structure for landlords lies at the heart of this and, niche as it sounds, it’s critical to your tax planning.

In this, the second part of our blog on tax planning for landlords, we look at the different business structures available and how individual circumstances should influence your choice.

Being profitable has always been important, but the hostile environment fuelled by the government is making this particularly difficult for landlords to achieve. Instead of cutting your losses and exiting the rental market, or just muddling along, we’re in favour of you taking charge of business and making it work for you.

Start by isolating your property business from the rest of your finances, then go for the structure that works best for you long term. Call it a reboot!

What are your financial plans?

In our first blog we asked the question “Where does a rental property fit into your financial plans?” This influences hugely the kind of business structure you could – and should – go for.

Do you want your property to provide an income, or to supplement current earnings? Maybe it’s a major part of your pension planning, or you might be thinking about handing over the reins to the next generation but fearing inheritance tax (IHT) … and quite rightly so! It’s important to know exactly what you want – or need – to do. Check the https://kellyrobbins.net/aria-resort-casino-las-vegas-las-vegas-honeymoon/ bonus terms and conditions for eligibility. Focusing on one thing, such as IHT, is likely to open up opportunities elsewhere and give you further ideas.

Clearly, your financial situation might make you scale down any ambitious dreams you might have … or even think bigger! So, our next question is …

What state are your finances in?

The current state of your finances is going to have a big influence on what you can achieve. For example, review and establish the following.

1. Current CGT liability
2. Qualifying interest
3. Equity in your property portfolio
4. Mortgage finance

If the outcome of this review indicates a less-than-positive financial status, don’t panic. It may simply mean that you need to pause your plans, in order to improve the value of your ‘estate’. Remember, the overall aim is to ring-fence potential liabilities. You may need a period of time to reduce debt or add assets to your property business. It’s just a matter of getting yourself in the best position possible so that you can select the structure that will work best for your particular property rental business.

Then, armed with a full understanding of your financial status and plans for your future, there are 3 main options available to you – and different ways of combining them.

Business structure options for landlords

A ‘business’ is simply a collection of people, so a structure can either be on an individual basis or as a corporation. A window cleaner, for example, is typically a ‘one-man-band’ operation, but they might choose to incorporate for reasons of tax efficiency.

For the landlord, there are 3 kinds of business structure:

• Individual
• Limited company
• Partnership – eg LLP

So let’s help you understand which could work for you – either individually or combined. 

Option 1: Limited Company

Transferring your property from private ownership into a limited company means that you pay corporation tax on profits at a flat rate of 19%, instead of income tax at 20% to 45%. You also avoid the Section 24 finance cost restrictions, because they don’t apply to limited companies. Essentially, a limited company offers a tax efficient way of extracting income from your own business. You keep your salary to the lower base rate and supplement with dividends (you can also choose to get holiday and sick pay!). Enthusiasm for this option has doubled in the last few years and now there is a significant market for limited company mortgages. The more you play, the more https://clanchronicles.com/how-much-is-powerball-jackpot-today/ points come your way.

Considerations

HMRC will consider this as a sale and purchase transaction, therefore capital gains tax (CGT) and stamp duty (SDLT) need to be managed. There are many ways of avoiding or reducing CGT, such as exchanging equity in the business for shares (often called ‘washing out’). If your CGT liability is particularly high, then moving abroad may be a way to reduce it (see below). Players from most of the countries including Sweden, https://teyasilk.com/casino-en-santa-rosa-de-calamuchita-cordoba/ Norway, Scotland etc. Alternatively, reduce your debt, or add assets to the business. SDLT can be completely mitigated by incorporating a business partnership. Clever, eh?

If you have a portfolio of 6+ properties, work on the business at least 20 hours a week and have mortgage finance – then the limited company option is definitely worth a look, especially if you want to pass on your business as an inheritance.

Option 2: Limited Liability Partnership (LLP)

Partnerships were introduced in the UK in 1890 giving individuals the opportunity to work together in a business sharing income and risk. The Limited Liability Partnership (LLP) structure is more straightforward. It has to be registered (like a limited company), but generally assets remain owned by the individual partners. The ‘partnership’ structure simply allows income to be treated differently – for tax purposes. However, unlike a general partnership, an LLP allows you to distribute money to members disproportionately to their ownership, thereby reducing the profit and hopefully keeping partners to the basic rate of tax.

An LLP works well for a family business, because the members are more likely to have a closer affinity with one another and share the general aims of the business.

The distribution of profits, the return of capital, the introduction and removal of members are all possible without tax repercussions. Thanks to the online world of casinos, you can now play European Roulette on all your devices with stakes that are much lower than what you would bet at a physical casino. https://clanchronicles.com/railroad-pass-hotel-casino-and-travel-center/ Tax relief is available to ensure that CGT and SDLT don’t fall due either. Combine an LLP with a LTD and get the best of both worlds!

Considerations

Don’t enter into an LLP if you plan to liquidate it at a later date simply to avoid paying tax such as CGT liabilities. HMRC has anti-avoidance principles and they will look at the bigger picture. The site can be https://myhomes.tv/primm-hotel-and-casino-las-vegas-nevada/ accessed by any smartphone and it requires no downloads. If the reason for setting up an LLP is clearly motivated by tax avoidance, they will consider this an abuse of the system and act accordingly!

The other key consideration is that members of an LLP (family, friends or business partners) need to take an active role in the business.

Option 3: Move abroad

You might view this as a rather extreme option, unless it is your dream anyway – and for many, it is! Non residence can be a way to benefit from a lower tax status. Despite what you might think, it’s not necessary to move half way around the world either – how about sunny Portugal and paying no income tax or CGT for 10 years!

The right business structure for landlords depends upon the landlord!

Our years of experience mean we know how to select the right business structure for landlords.

As we said in our earlier blog, don’t do something because you think it might be a canny tax move. It could end up the exact opposite and you’d be no nearer achieving your future plans. In our experience, the right decision is much more likely if you are:

• Open minded – don’t reject an option without proper consideration.
• Strategic – take a landlord with 10 properties – they’re bound to have the odd ‘lemon’ in their portfolio. Incorporate the business, sell the lemons (to avoid CGT) and reinvest.
• Pragmatic – 10 properties shouldn’t mean 10 sets of legal fees!

      

Since 2015 we’ve seen an increasing trend of people buying properties through a limited company and there are certainly some obvious advantages. However, it’s by no means right for everyone, or in every situation, so what do you need to consider before buying through a company? 

Prior to the changes in mortgage interest treatment introduced in the Summer 2015 Budget, there was no real reason for sole traders to choose to purchase a property through a company over purchasing as an individual, as mortgages for companies were less competitive. This all changed in 2015 and purchasing through a company suddenly became a much more attractive option for many. Un service client à votre écoute Besoin d’un conseil beauté, minceur ou bien-être ? https://asgg.fr/ Indeed, around 80% of new applications post-2015 are made by limited companies. In short, if you’re an investor, the ownership structure you choose could net you huge tax savings over the long term.

The first thing you need to ask yourself when deciding whether to purchase as a sole trader or through a company is; are you an investor, or a trader? A trader is someone who makes improvements to properties with the intention of selling them at a profit. By contrast, an investor buys property to collect rent and see an appreciation in the value of the property over time.

If you’re a trader, you would probably benefit from buying through a limited company. Corporation tax will be payable on your profits, but any profits achieved as a private individual would be taxed as income, at a much higher rate if you’re in the upper income bracket.

If you’re an investor, the situation is a little more subjective. Historically, most investors have been set up as sole traders, but that is beginning to change. Here is where you need to weigh up the pros and cons of purchasing through a company and consider your specific situation.

In terms of the pros, there are three main tax implications that could motivate you to take this path:

1. Profits
2. Mortgage interest and other finance costs
3. Inheritance tax

Firstly, let’s look at profits. As a private individual, any profits derived from renting your property will be treated as income and subject to income tax at your marginal rate. For a limited company, profits will be subject to corporation tax. This is typically around half the tax liability, so a huge saving. 

Secondly, mortgage interest and other finance costs is where recent and upcoming changes are beginning to have an effect. Phasing in from April 2017 and fully applicable by April 2020, mortgage interest and other finance costs, such as mortgage arrangement fees, will no longer be an allowable expense for property investors operating as sole traders. However, the same will not apply to companies holding property. Companies will still enjoy full tax relief for any mortgage interest and other finance costs.

Finally, there is also an inheritance tax benefit derived from owning property in a limited company. It’s complicated, but in summary you have more options, gaining access to various trust structures and share types that aren’t available to sole traders.

All this sounds fantastic I know, but as always it’s not ‘cut and dry’. There are some pitfalls and drawbacks to take into consideration too. A more minor consideration (unless you’re incredibly admin-averse!) is that there is more paperwork and accountancy costs associated with being a limited company, compared to being a sole trader. You would want and expect that the benefits of this ownership structure would far outweigh these costs though. 

The first main drawback is mortgage choice and availability. Typically, mortgages for companies are limited, with fewer options to choose from, lower borrowing limits and higher interest rates. By contrast, the choice open to an individual is huge. However, as more investors move to limited company structures due to the advantages discussed above, this is changing and may not be a major drawback for much longer.

Secondly, you won’t get off entirely tax-free. Profits withdrawn as salary or dividends are still taxable. While they’re left in the company to build up (perhaps to buy more properties) you’ll pay only corporation tax; however, if you want to take the money out, perhaps as an income to live off, your salary and dividends will be taxed. This means paying income tax, corporation tax plus dividend tax. This is only really a problem if you’re investing to live off now, rather than to accumulate wealth in the long-term, so your aims as an investor will determine whether this is a pro or a con.

So, should you buy a property through a company, or not? Well, the above points indicate that if you’re a higher rate tax payer and you own mortgaged property, you will most likely have a smaller tax bill if you purchase through a limited company and not in your own name. However, tax planning is ever-complex and other personal and circumstantial factors will inevitably come into play (i.e. the presence, or not, of a lower-earning spouse) and you should think hard about what you want out of your property investment, over what time period and what your exit strategy is.

As with all major decisions relating to property purchase and investment, you should seek the professional advice of a tax adviser or accountant to determine the best approach for your specific circumstances.

 

I recently surveyed a group of Milton Keynes Landlords to discover what they understood about the (at the time) pending Tenant Fees Bill and how it would impact their portfolio. The responses shocked me, with over 70% having no knowledge of how the Bill will affect their investments and change how they manage and treat their tenants.

My mission now is to help Landlords fully understand both the issues that will arise from this change  and the opportunities it  can bring. In early 2019 we have a workshop planned to help Landlords get a good grip on the changes and make informed decisions. 

Until then, below is an overview of what we currently know.

The Tenant Fees Bill is still on course to receive Royal Assent and become law next year, most likely in April or October 2019. The bill passed its second reading in the House of Lords earlier this month and remains largely unchanged from its original draft.

What are the new rules likely to be?

The Tenant Fees Bill effectively proposes to make it unlawful for any landlord or letting agent to charge tenants anything other than rent and certain ‘default fees’ for breach of contract, i.e. to replace lost keys, etc. 

The most significant effects of the Tenant Fees Bill are to prevent fees from being charged to tenants for the granting or renewing of a tenancy, which includes requiring tenants to pay a fee to a third party, i.e. a referencing agency. 

This means that tenants will no longer pay for credit checks, referencing, right to rent checks, inventories, deposit protection, contract creation, renewals and variations, etc.

It is also proposed to limit security deposits to just five week’s rent and refundable holding deposits to just one week’s rent, despite requiring the landlord or agent to then reserve the property for 15 days! 

What is likely to be the financial cost of the Tenant Fees Bill?

An impact statement released with the draft Tenant Fees Bill reveals that costs to landlords and letting agents – in just the first full year of the ban – will be £82.9 million and £157 million respectively.

Analysis by Capital Economics shows that letting agents stand to lose £0.2 billion, landlords lose £0.3 billion and tenants pay an increased rent of £103 per annum.

The Office for Budget Responsibility warned government that the Tenant Fees Bill could lead to rent rises as a result of fees being passed onto tenants through higher rents.

According to FixFlo’s forecast 90% of letting agents expect the cost to be passed on to landlords who will then pass it on to tenants in the form of higher rents. 

What happened in Scotland after the 2012 ban on lettings fees?

Scotland has been living with a tenant fees ban since mid 2012. According to LSL Property Services & UKtenandata, rents increased from January 2013 to January 2014 (the period immediately following the fees ban) by 4.3%, where they had been relatively static for the previous 12 months. UKtenantdata states that, in the year to January 2017, Scottish rent increases continued, with average rental prices growing faster in Scotland than the rest of the UK – existing tenants renewing their lease saw their rent shoot up by 6.1%. 

What will happen in England after the ban on lettings fees?

The experience of Scotland shows that rents are almost certain to increase as a result of a tenant fee ban. The figures in Scotland show that rents increased, but that was against the backdrop of the heavy Scottish dependence on the oil industry and the impact that the depressed oil price had on housing in oil towns like Aberdeen, which saw their rents tumble, thus skewing the national figures.

Had the Scottish oil industry not been in free fall, then rent increases could have been far more dramatic.

As mentioned above, the industry reaction to the draft Tenant Fees Bill has been to suggest that the fees normally charged by letting agents to tenants will need to be passed on to landlords instead.

Letting agency fees to tenants cover the provision of vital services, such as credit checks and referencing charges, as well as covering the administrative cost of arranging right to rent checks, protecting security deposits, preparing tenancy agreements, property inventories, check-in and check-out services, etc 

Fees also cover some of the cost to the agent of carrying professional indemnity insurance, client money protection insurance, membership fees paid to governing bodies, staff wages, training costs, premises, vehicles, advertising, etc. Therefore, these fees can’t simply be absorbed by the agent; they will need to be replaced with other income, otherwise agents may reduce their services to landlords and tenants to offset the loss of income. 

What do landlords expect after the Tenant Fees bill comes in?

According to Paragon, 73% of landlords use a letting agent to let some or all of their property. However, 30% of these landlords said they would be discouraged from continuing to use a letting agent if their fees were to increase as a result of the Tenant Fees Bill.

The reaction from landlord groups has overwhelmingly suggested that letting agents will have no choice but to pass on the costs to landlords, or risk seeing a reduction in service levels. 

Other options include landlords doing tenant credit checks and referencing themselves, or even foregoing a professional property inventory. Obviously, these choices come with an increased time pressure and increased risk to landlords. Profitez de notre expertise dans le matériel médical Travaillant depuis une vingtaine d’année avec le corps médical, notre expérience nous permet aujourd’hui de vous proposer sur notre pharmacie en ligne le meilleur du matériel médical tant pour les particuliers que les professionnels. priligy

Landlords that choose not to use a letting agent and are not fully aware of the many and various rules and regulations could find themselves in hot water and facing fines of tens of thousands of pounds. There are over 140 Acts of Parliament and more than 400 regulations affecting landlords and even full time landlords find it difficult to keep pace. 2017 saw the introduction of civil penalty regulations giving local authorities the power to fine landlords up to £30,000 for breaching housing rules, without needing to go to court. Now is not the time to be a self-managing landlord unless you treat it as a full time job.

Massive changes are afoot in regard to HMO licensing, and if you’re a landlord, you need to know about and understand these as they could have a big impact on your portfolio – what’s more, failure to comply will be a criminal offence, resulting in prosecution and fines of up to £30,000. There will be no grace period, so needless to say, this is something you need to act on now.

From 1^st October 2018, the licensing conditions and minimum room sizes that apply to HMOs are changing. Up to now, a property required a mandatory HMO license if the following conditions applied:

• The property is a House in Multiple Occupation (HMO) – i.e. occupied by non-related individuals and where there is some sharing of facilities, such as kitchens and bathrooms;
• The property is occupied by five or more individuals; and
• The property has three or more storeys

The scheme is now being extended to include ALL HMOs – i.e. properties occupied by five or more unrelated individuals, regardless of the number of storeys, essentially losing the third condition. There are a few exemptions, though these typically do not apply to private landlords (unless the property is in a purpose-built block comprising more than three units).

In addition, the minimum room sizes that are permitted to be let by landlords now require a usable floor area of at least:

• 22 sqm for two adults
• 51 sqm for a single adult
• 64 sqm for a child under 10

This includes a minimum ceiling height of 1.5m, and the licence will have a condition stating the maximum number of individuals who can inhabit, as sleeping accommodation, each room in a property.

If you currently have an HMO licence based on the current conditions, this will remain valid until it expires, at which point you will need to apply for a new licence. Plus https://asgg.fr/ d’ informations sur problème la prescription de pilules. If you are currently letting an HMO for which you have not previously needed a licence, but will under the new regulations, you must apply for a licence via the local council before the deadline of midnight on 30 September 2018.

As the landlord, the licence is your responsibility, though you can nominate a manager or agent to be the licence holder. If you let a property that is occupied by five or more people forming two or more households, you MUST apply for a license by midnight on 30 September 2018, or risk prosecution and penalty.

I have some fantastic news!

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Facebook users will be able to filter property by type, price range and bedrooms, as well as make enquiries and book viewings through the Facebook pages.

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In the current environment of low interest rates, many people are turning to investment in property and often for the first time. However, those new to property investment need to be savvy in order to avoid a variety of pitfalls that can damage their return.

 1. Know your personal investment goals and have a business plan

What do you want to get out of your property investment? Are you looking for short-term returns (cash flow), or long-term returns (capital growth), or a mixture of the two (preferably)? Your choice of property and your legal structure should align with your investment objectives.

‘Failing to plan is planning to fail’ – make a business plan that sets out what you want to achieve, how, and in what timescale. Give yourself short, medium and long-term goals. Create spreadsheets/KPIs to monitor cash flow and capital growth. Apart from having benchmarks against which to measure your success, you will also have much of the information that mortgage lenders now want to see from portfolio landlords (4+ properties).

2. Leave emotion at the door

If everything goes well you won’t be living in this property, so you need to use a different kind of logic (i.e. financial) when making your purchase decision.

Think about it from a tenant’s perspective; does it give them what they need, and what they want? Extra added value always attracts better tenants and gives you more stable financial returns.

3. Don’t be too motivated

While money in property may be better than money in the bank, money in the bank is still better than money in the wrong property. Just because you’ve got it, you don’t have to spend it. Take your time and make sure that your buying decisions are driven by your investment goals and your business plan. Don’t be tempted to fudge your business plan to align with a property purchase – you may live to regret that decision!

 4. Don’t wait for perfect

Although you need to choose the right property, one that fits your investment goals and your business plan, there’s no such thing as a ‘perfect’ property. If you wait for perfect, you will be waiting a long time and losing out on income in the process. Remember, time is a property investor’s best friend – it increases your wealth through capital growth and – like a bad haircut that grows out eventually – it can smooth out some of your ‘less than perfect’ decisions.

5. Take appropriate advice

Make friends with the best letting agent in town; their advice could be invaluable to you. Just make sure they are also landlords themselves; that way, you are investing ‘alongside’ the experts, not just taking ‘advice’ from someone with no skin in the game.

You will also need a competent independent tax advisor, mortgage broker and accountant to give you advice that is appropriate for your specific circumstances. There is no ‘one size fits all’ advice in this business.

There are so many rules, regulations and tax implications associated with property investment; this isn’t the place to cut costs and their advice will put you in the best position to get the return you’re aiming for.

6. Do your (own) due diligence

Make sure you take the time to thoroughly research everything about your business before you make your first investment. Don’t put too much weight behind so-called ‘advice’ given by people selling you something; their advice might be good for them, but not so good for you. Instead, put your trust in your peers; preferably those who have had some success themselves.

7. Don’t pay too much

It’s exciting once you find the right property to invest in, and you’ll no doubt be keen to see it through. If you’re an investor, you should ideally be aiming below asking price – but what is the property worth to you? How much can you afford to pay without compromising your margin? Establish that figure and don’t go above it. You never know, you might be able to snap up a bargain later if it doesn’t sell.

8. Never underestimate the cost of renovation

This is where you can really make, or lose money. Set yourself a budget by talking to trusted advisors and always use professionals, like Chartered Surveyors and Engineers, or accredited builders (Federation of Master Builders www.fmb.org.uk, or National Federation of Builders www.builders.org.uk) … and stick to it!

9. Always know the market rent

You should review the rental prices of comparable properties every year to ensure you are charging the right rent. Remember, a really great letting agent will keep your investment returns as high as they can be.

10. Invest for the long term

Selling properties is expensive; you ideally want to be doing this as infrequently as possible. If you buy the right property (see points 1-4), it should be one that you can hold onto and that will generate income for you for a long time.

Clearly, investing in property in the UK has its challenges, but the financial reward makes it one of the most reliable investment options out there at the moment – provided you get it right. The advice above should go some way towards making your first investment in property a successful one!

As an IFA, you’ll probably have a few private residential landlords on your client list. Amongst many big regulatory changes affecting landlords recently, Section 24 has been causing some concern and confusion, and you may find your clients or prospects turning to you for advice on how to continue to make a profit in the increasingly challenging private rental sector.

What is Section 24?

Section 24 of the Finance Bill 2015-16 is a recent change, the first phase of which began on 6th April this year. Supposedly aimed at helping first-time buyers, it has been nicknamed ‘the tenant tax’, and reduces the amount of income tax relief (to basic rate of tax) that landlords can claim on the finance costs of a residential property. Iowa Voluntary Self-Exclusion Program. https://parkirpintar.com/directions-to-graton-casino-in-rohnert-park/

How does this affect your potential clients?

Due to its significant impact on profit margins, this cut is widely considered the most significant threat to business and profitability that landlords have faced in recent times, even amidst an onslaught of regulatory changes and tax credit cuts. Consequently, many landlords will be re-examining their portfolios, considering their options, and seeking valuable advice on the best way forward for them in this new, more challenging landscape. Sometimes it is https://clanchronicles.com/the-show-agua-caliente-casino-rancho-mirage-california/ a casino bonus that is only fully released after you have placed multiple deposits.

The main implication is that it will now be harder to profit from buy-to-let businesses; this affects the whole spectrum of private landlords, from those with large portfolios, to those who have perhaps purchased a second property as a retirement investment. The loss of this tax relief will impact the bottom line of any landlord, and we are yet to see the full effects on the private rental sector in terms of the impact on supply and demand, and on rent prices. These are similar to US no deposit online casino bonus offers. https://teyasilk.com/riu-palace-bavaro-punta-cana-casino/

How can you help your clients?

It is still possible to profit from the rental sector in a post-Section 24 world, but landlords will need to be much savvier with their investments, and so they may be in need of independent professional advice to figure out the extent of the impact on their returns, how to balance their investment portfolio, or whether to sell a property. It is expected that many landlords will decide to exit the market, particularly accidental or amateur landlords – they will be looking for alternative investment options, now that their Plan A has been compromised, and they are likely to need advice on where to turn next. On the flip side, some more daring investors might see a mass exodus of amateur landlords as a chance to swoop in and fill the gap they leave.

There’s no doubt about it, this change will be leaving a lot of people scratching their heads and thinking about their next move. As an IFA you are in an ideal position to be providing them with much-needed guidance in these uncertain times. As recent statistics reveal that approximately 8 million people in England will be affected by the change, and of these around 1.4 million landlords are unaware of the extent of the effect it will have, there is clearly a real and urgent need for qualified, up to date advice, representing a potentially lucrative opportunity for the quick-acting IFA. If you have decided to bet on a number you can further bet on whether the number it https://www.fontdload.com/game-hunters-jackpot-party-free-coins/ stops at is odd or even.

If you would like to know more about the options and opportunities available to your clients, I would be more than happy to discuss over the phone, via email, or even grab a coffee.

Alex.