If there’s one subject that makes many of us who are self-employed shudder, it is tax and an impromptu visit from HM Revenue & Customs.
As a landlord of an investment property portfolio unfortunately you have to pay tax on rental investment. There’s also capital gains tax to think about. Then there is inheritance tax (should it apply) to throw into the mix.
And that’s why here at Property Go-To Girl we’re providing a quick run-down on the type of tax incentives you can look to claim when investing in an HMO or other buy to let property in 2014 and for the foreseeable future.
Advice around tax for landlords is certainly badly needed - that's if a survey commissioned last summer by Paragon Mortgages is anything to go by. The finance company's research found that of those landlords who were interviewed for the study a massive 78 per cent of them admitted they were a bit baffled when it came to their property investments and tax. This is despite the fact some of those landlords who were questioned had more than 11 buy to let properties in their portfolio (yes, we were pretty stunned at that too!).
Does your HMO property have a garden? If so, this can be a definite positive as far as a tenant is concerned. Who doesn’t dream of sitting out the back on a patio-type area with a glass of wine of a summer’s evening, for instance? And again, not all of us want to head to the public park for a bit of sunbathing.
Then again, a garden does come with a lot of upkeep. Are you going to hire a gardener or expect your tenants to pitch in maintenance-wise? This is certainly something to consider when it comes to renting out your HMO property – or even purchasing it in the first place.
Certainly, in the case of an HMO it can be a bit of a mixed bag when it comes to expecting your tenants to keep the garden in order. Squabbles over whose turn it is to mow the lawn instantly spring to mind, for instance.
So what are the alternatives?
Thinking of investing in a House of Multiple Occupancy (HMO)? It can be quite a bit of hard work initially and does need a lot of time investment if you're planning to do the management of the property yourself. However, the returns can be phenomenal when compared to investing in a buy-to-let. And, if a report published this month is anything to go by, as the owner of an HMO you shouldn't have to worry too much about attracting tenants in future - especially young professionals,
How so? Well, it's because rooms in HMOs are becoming the accommodation of choice for this growing sector of the population. Certainly, it's what the data in the report - commissioned by one of the UK;s leading student property investment companies - shows.
I'm Jacquie the Property Go-To Girl. I am passionate about property. I love to help people make the most out of their property investments!