Tips for managing a rental property abroad
Buy to let property in the UK can serve as an excellent investment for landlords who choose to live abroad, giving them a steady income stream to fund their lifestyle in another country.
But being a long-distance landlord is not without its challenges - communication can be difficult, tenants can’t be met or screened-in person and landlords may have to entrust somebody else to carry out viewings for them should a tenancy end whilst they are abroad.
For this reason, most international landlords choose to use a letting agency, who can deal with every aspect of managing their property whilst they are abroad. If you are an international landlord to be, read our top tips for making the letting process as stress-free as possible.
Understand Your Legal Obligations
If you rent a property out in the UK, you will need to pay tax on the rental income, being an international landlord does not exempt you from this. If you live abroad for 6 months or more per year, you are automatically classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC). Note that if you are only outside the UK temporarily (less than 6 months), you are not classed as a Non-Residential Landlord.
The tax you owe on rental income can either be paid through a Self-Assessment tax return form or by deducting a basic rate tax from the rent, this will need to be done by the tenant or by a letting agent who will provide you with a certificate at the end of each tax year. It is critical to remember that either option does not negate your responsibility of filling in a tax return. If your income is under the UK tax threshold, HMRC may not need a tax return but they will inform you of this. The Inland Revenue are extremely helpful in this regard but do visit the GOV UK website for more information.
Consider Using Skype for Tenant Screening
One of the biggest challenges faced by landlords living abroad is that they cannot meet tenants face to face before approving their rental application. Whilst this is less of a problem when using a letting agent, determining whether a tenant is suitable for your property can be difficult and slow when relying on written communication.
For this reason, landlords may choose to use Skype or other video messaging platform to ‘meet’ their tenants face to face before approving or declining their application.
Look for Long Term Tenants
The administrative demands of several shorter tenancies are far more significant in comparison to fewer, longer tenancies. Landlords with long-term tenants are also more likely to develop stronger relationships with their tenants, taking away any concerns about how the property is being treated.
From the tenant’s perspective, longer tenancies are also a benefit, offering them more security and a guaranteed place to rent for the duration of the agreement.
Ask Someone to Keep an Eye on the Property
Landlords may choose to ask a family member, friend or neighbour to keep an eye on the property whilst they are abroad – this way they can be informed straight away should any misbehaviour occur at the property.
Using a property management company relives family and friends of this labour, as the agent will be responsible for dealing with tenants and carrying out property inspections.
Additionally, if the property is empty, it can become an easy target for thieves. Having a friend or family member check in on the property, clear out any post, park their car on the drive and otherwise make the property look in use can be a sound deterrent for thieves.
Build Up Relationships with Tradesman
As well as better prices, building up relationships with a local tradesman is a great way to make managing a property overseas simpler.
With the right contractor, you can give the tenant their number, meaning that any property maintenance can be rectified quickly without your input, this can also make tenants happier and feel more independent. Read our guide to hiring the right contractors for more information.
Use a Property Management Company
The best way to simplify the potential headaches of managing a property from abroad is to let someone else do it for you, many landlords who have tried to manage their property solo from abroad find the time spent is not worth it.
A property management company like ourselves can take care of everything from collecting rent to ensuring you’re paying the right amount of tax. What’s more, we aim to keep tenancy voids to a minimum of 8 days, with our expert knowledge of the area helping us attract the right tenants to your property.