Around 400,000 people a year leave the UK to live abroad. For some, it will be a short term move, perhaps for a new job. For others, it will be more permanent, retiring to warmer climates, for example. Whatever the reason, however, it doesn’t mean people can’t earn extra income as a landlord whilst living abroad. Before they to become a landlord, however, they need to think about what this means.
Just like a landlord in the UK, those living overseas must meet their legal obligations such as:
- Ensuring health and safety regulations are met, including making sure all gas and electrical equipment is installed correctly and well maintained.
- Providing an Energy Performance Certificate.
- Protecting tenant’s deposits.
- Confirming tenant’s rights to rent a property in England.
You also need to ensure you pay your taxes. Again, your tax obligations are the same as if you lived in the UK. However, the way you pay tax is different. HMRC ask landlords to deduct 10% from rental profits at the basic rate. This must be paid every quarter.
At the end of the year, you can offset any profits against your tax bill. You can ask HMRC to approve receipt of rents without deducting tax. However, in this case, you need to complete an annual self-assessment tax return.
Use a Property Management Company
One of the ways to reduce the stress that can come with meeting your tax obligations is to get help from a company which offers property management services, like here at Pat Robson & Co.
There are numerous benefits of this approach, including:
Finding The Right Tenants
Screening tenants from another country can be difficult. There is paperwork to review, questions to ask, and references to check. All of this takes time, especially if there are time differences. A property management company can screen tenants for you quickly and easily, meaning they’re more likely to be of a high-quality. Furthermore, they are more likely to stay long term.
Less Downtime Between Tenants
When tenants do leave, finding a new one can take time, especially if you have to make repairs. Using a property management company can reduce the downtime between tenants because they have connections with contractors, meaning repairs are done quickly. They often also have a list of potential tenants they can market your property too.
Return On Investment
Reducing downtime can improve your return on investment. So does charging the right amount of rent. You can often gauge this by looking at other rentals on the market. However, a property management company who knows the local market can offer advice on the optimal rental price, maximising income.
Understanding your legal obligations can be difficult. It can also be costly if you get it wrong. Using a property management company can help you avoid potential issues because they’re experts in the legal requirements of renting a property. They can, for example, make sure your property meets required health and safety standards. They can also help you with difficult situations such as evictions.
Value For Money
No matter how careful your tenants are, at some point, you’ll need to carry out property repairs. Find contractors when living abroad can be as tricky as finding tenants. Property management companies will generally have preferred suppliers who can quickly make repairs.
Preferred suppliers often offer reduced rates too, which can save you money. Remember also; a well-maintained property will allow you to charge a good rental rate and retain tenants long-term.
Long Term vs. Short Term Tenants
Because of the distance involved, managing a UK rental property when abroad can take time. This is why it’s a good idea to favour long term tenants over short term ones. You’re less likely to find yourself advertising your property every six months with long term tenants.
You’re also more likely to maintain a steady, reliable, income stream and have fewer outgoings because you won’t have to touch-up the property between renters.
There are lots of benefits to being a landlord, even if you live abroad. There are also lots of benefits to hiring a property management company. You have less stress, for example, because you know tenants won’t be calling you asking for an emergency plumber in the middle of the night. And you have more freedom.
Gone are the worries about remembering to pay your taxes each quarter or get the gas appliances checked. You can be confident your property management company will do this for you, leaving you to enjoy your life and the income your rental property can provide!