Keeping control of the finances is obviously a massive part of being a successful landlord.One of the first thing that a landlord should realise on the finance front is that many landlords make their profit when they buy, not when they sell. What do I mean by that? Essentially if you can acquire a property at a good discount from a motivated seller providing the market does not show any steep fall you should be in a good position.
When making you initial investment remember the 3 pillars of buy-to-let and ensure that you have carried out an investment appraisal of your prospective buy-to-let property to establish that it will make an acceptable investment return.
Once you have purchased your buy-to-let property make sure you keep tabs on your tenant’s rental account. To do this you can use the rent book within the Property Manager.
One of the most important metrics a landlord has in measuring the health of their rental business is the cashflow.
In otherwords how much cash is left over each month after you have paid your mortgage, insurance, and other expenses. You should know firstly whether your rental business is cash generative or are you running a monthly deficit? In which case can you do something about turning that negative situation positive by reducing your insurance costs or your mortgage expenses.
Having established your finances are stable every landlord is required to submit a tax return at the end of the year. This is irrespective of whether a landlord has made a rental loss or profit.
Make sure that you don’t have to pay any more property tax than you need to.
To calculate the tax payable on your rental business use Property Hawk’s free property manager software.
Don’t forget you can now email your accountant your calculations directly from the software.
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