{"id":1793,"date":"2012-09-19T09:00:01","date_gmt":"2012-09-19T09:00:01","guid":{"rendered":"http:\/\/blog.legal4landlords.com\/?p=1793"},"modified":"2012-09-19T09:00:01","modified_gmt":"2012-09-19T09:00:01","slug":"accidental-landlords-expanding-buy-to-let-profits","status":"publish","type":"post","link":"https:\/\/dev.withcreative.co.uk\/lforl\/accidental-landlords-expanding-buy-to-let-profits\/","title":{"rendered":"Accidental Landlords Expanding Buy-To-Let Profits"},"content":{"rendered":"
\"Accidental<\/a>

Accidental Landlords Expand Buy To Let Property Portfolio's<\/p><\/div>\n

According to data from the National Landlords Association (NLA) only 57% of current landlords deliberately set out to enter the UK Buy-To-Let market.<\/p>\n

Many property owners became \u201creluctant\u201d or \u201caccidental\u201d landlords in unexpected ways, often due the inability to sell property because of the recession and the perceived crash of the UK property market.<\/p>\n

However, after seeing how lucrative investment property can be, these \u201caccidental\u201d landlords are choosing to expand their rental property portfolios.<\/p>\n

The most common reason for accidental landlords entering the buy-to-let market is that they had already moved on and wanted to delay selling their property until the property sales market improved. In the mean time they had rented out the property as they needed to earn an income to cover the mortgage payments. On the discovery that they were in fact making profits many reluctant landlords decided to find out more about investing in property.<\/p>\n

Figures from the NLA show that the number of its members affected by this scenario had risen from 5% to 9% by the\u00a0first quarter of 2012.\u00a0<\/p>\n

Often personal problems can affect the future of a joint property. For example, many couples going through a divorce are forced to split a joint asset, but because of the stagnated housing market must rent it out. In 2011 there were 119,610 divorces in the UK and a high proportion of the couples involved would have owned a house.<\/p>\n

Some accidental landlords have also inherited a property from a relative. As the owner you may be liable for inheritance tax and capital gains tax.\u00a0If the estate is worth more than \u00a3325,000 (for deaths in the 2012-13 tax year) there will be an inheritance tax bill of 40% of any amount above the \u00a3325,000 nil-rate band.<\/p>\n

Most inherited properties will also be unencumbered, meaning the rental income generated will be almost purely profit, especially if the property is below the \u00a3325,000 inheritance tax threshold.<\/p>\n

According to Baring Asset Management, 6 Million people in the UK expect a family inheritance to help fund their retirement.\u00a0<\/p>\n

Renting out a family home can provide a healthy income stream and many people are using this asset as a pension.<\/p>\n

Other accidental landlords include parents who have purchased a house or flat for their child while they are at university, and they have now graduated and left their university town.<\/p>\n

This is a common occurrence but can often work to a parent\u2019s advantage as there will be a constant flow of potential tenants in an area close to a university.<\/p>\n

Owning a buy-to-let property is an excellent way to make extra income as high rental yields are currently achievable even though house prices are still reported to be falling in some areas of the UK.<\/p>\n

Becoming a landlord can be challenging but financially very worthwhile<\/span><\/h3>\n

There are certain essentials that every new landlord needs to bear in mind, and in any career there are risks associated with it. When letting for the first time, be mindful of choosing the right tenants<\/a>.<\/p>\n

According to the NLA, 49% of landlords have experienced rental arrears in the last 12 months and more landlords are using Rent Guarantee insurance<\/a> as a fantastic way of protecting the rental income \u2013 Find out more here<\/a><\/p>\n

Top tips for accidental landlords:\u00a0<\/p>\n