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We know that choosing a letting agent who understands the local market and who operates to the highest possible standards at all times is sometimes hard to come by. Smart Homes meet both of these criteria’s. We feel our customer service and image is superior to any of our competitors, a formula that gives our customer’s the edge.

The buy-to-let market has grown, and continues to grow, due to the fact the UK is experiencing a housing shortage. An increasing population has led to a shortfall in available properties and, as a result, house prices in many areas have risen to unaffordable levels for a lot of people – especially first-time buyers. This has meant that people have been forced to rent instead.

Buy-to-let is an increasingly attractive investment in the UK, and for many, property has a unique physical appeal that shares and investment funds just can’t match.

But buy-to-let investing is subject to several taxes, whether you own a single property or many.

There are four taxes that your investment in a buy-to-let property will possibly incur:

There are two revenue streams for landlords – capital growth and rental yield. Capital growth, which can also be known as capital appreciation, is when the value of your buy-to-let property increases over time. It’s important to recognise, however, that while property value goes up, it can also come down. Local house prices and market conditions can have a significant effect on capital growth.

Rental yield, meanwhile, is the amount of money you will receive from your tenants in rent, and as rental market conditions change over time, the hope is that you will be able to increase your letting income by raising rent as well.

The income you receive as rent is taxable. You need to declare any rent you receive as part of your Self-Assessment tax return. The tax on your income is then charged in accordance with your income tax banding (20% for basic rate taxpayers, 40% for higher rate, and 45% for additional rate).

However, you can minimise the tax you have to pay by deducting certain “allowable expenses” from your taxable rental income. Allowable expenses include:

Here’s our top tips for property investors;

  1. Consider how hands-on you want to be – buying property is only the first step!
  2. Know the pitfalls before you make any investment and investigate all possible aspects.
  3. Haggle over the price of the property – make sure you’re not overpaying for a property.
  4. Consider looking further afield or doing a property up before you sell it on.
  5. Don’t be over ambitious – go for rental yield and remember possible unforeseen costs.
  6. Think about your target tenant – who are they, what do they need?
  7. Shop around and get the best mortgage – Don’t walk into your bank and building society and ask for a mortgage.
  8. Research the market – if you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits?