Before taking the plunge one must also consider the tax implications

• Rent will be treated as income and taxed in line with your basic or higher-rate tax bands. You will however, be able to offset mortgage interest payments, letting agency costs and maintenance expenses against the taxable rental income. This makes it more tax efficient to have a mortgage on your investment property rather than you main home where you can no longer get tax relief on your mortgage.

Capital Gains Tax

• Capital Gains Tax kicks in when you sell your second home, but you will receive taper relief, which gradually cuts your tax liability, depending on how long you have owned the property. After three years you would be taxed on 95% of the gain. This falls with each year, and after ten years you would only be taxed on 60% of the gain. When you sell your second home you will be taxed at between 20 – 40% on all relevant capital gains above a basic limit.

Buy to let Landlord Tips

• Think about your target tenant. Research tenant demand as your highest priority.
• Consider established areas with good communication links.
• Consider ongoing costs, e.g. maintenance, service charges etc.
• Form close relationships with letting agents and relocation agents.
• Be prepared to buy tired properties and refurbish them.
• Do think of Buy to let as a mid to long term investment.
• Don’t think that running an investment property can be left to friends or relatives in your absence. Tenants require a full management service.
• Don’t use off the shelf tenancy agreements. Leave all documentation to your agent, who will be drawing on many years experience to ensure that all factors are considered.
• Don’t furnish the property with second hand furniture or cast off furnishings as these will not only look tardy, but will likely contravene the furniture and furnishing regulations.

Regulations

• Regulations are constantly changing, particularly with regard to safety. Any Sherwoods office will be able to advise you about compliance with an new and difficult regulations including, fire and furnishing, gas and electrical installations, non-UK resident landlords tax obligations, & HMO’s (houses of multiple occupation).

You’ve invested your money and bought your property – what now?

• Imagine a phone call at 8pm on a Friday night. You’ve just got home (or just packed up to leave for the weekend) and there is an irate man on the phone yelling at you. You know he is angry and you can guess it is your tenant, but apart from that you don’t understand a think he is saying, except of course, you know something has gone wrong. Now imagine you never got that call, Imagine the problem never happened because Sherwoods sorted out all your problems BEFORE the tenant moved in.
  
  Call into any Sherwood office located throughout the South West to discuss how we can offer you peace of mind on your investment. Sherwoods know their local market and will give you accurate advice on tenant demand, realistic (not inflated) rental levels, property valuations and local comparables. Sherwoods will vet tenants thoroughly using a detailed application form, interview and check tenant’s identities, check credit references, take up references and check affordability.
  
  THERE IS A LONG TERM OPPORTUNITY TO MAKE STABLE AND PROFITABLE RETURNS IN LETTING OUT OF BRICKS AND MORTAR! CALL INTO YOUR LOCAL SHERWOODS OFFICE TODAY FOR SPECIALIST ADVICE ON ALL YOUR PROPERTY INVESTMENT NEEDS.
  
  Our residential lettings teams provide a focused and personal service dedicated to enhancing clients' property interests.  We offer tailor-made solutions to accommodate your particular needs in town and country locations.  We also advise on the purchase and sale of private and investment property including buy-to-let. Buy to let can be a minefield for the inexperienced. Be sure to take sound advice from Sherwoods as well as researching and assessing your own market and your interests should be well served