How to Manage a Rental Business From Home?

Is it possible to manage a rental business from home? A landlord will often manage their property rental business from home, and in doing so will incur additional household expenses, such as additional electricity and gas, additional cleaning costs, etc. Let’s find out how to manage a rental business from home?

As with other expenses, the landlord can claim a deduction for these when working out the profits of the rental business. Most unincorporated landlords will now prepare accounts on a cash basis.

Wholly and Exclusively Incurred

The basic rule for an expense to be deductible in computing the profits of a rental business is that the expenses relate wholly and exclusively to that business.

This applies equally to a deduction for household expenses – they can be claimed where they relate wholly and exclusively to the rental business.

Actual Costs

Where the expenses are wholly and necessarily incurred, a deduction can simply be claimed for the actual expenses.

In reality, this will take some working out as household bills will not be split between personal and business expenses.

Any reasonable basis of apportionment can be used – such as floor area, number of rooms, hours spent, etc. Records should be kept, together with the basis of calculation.

Simplified Expenses

Where a landlord spends more than 25 hours a month managing the business from home, the simplified expenses system can be used to work out the deduction for the additional costs of working from home. The expenses depend on the number of hours worked in the home each month, and the deduction is a flat monthly amount, as shown in the table below.

Hours of Business Use Per Month Flat Rate Per Month
25 to 50 hours £10
51 to 100 hours £18
101 hours or more £26

The hours are the total hours worked at the home by anyone in the property rental business.

Example

Nadeem runs his property rental business from home. In 2024/25, he spends 60 hours a month working on the business in all months except August and December, in respect of which he spends 30 hours in each on those months working on the business.

For 2024/25 he can claim a deduction of £200 for expenses of running his business from home (10 months @ £18 plus 2 months @ £10).

The simplified expenses rule does not cover the telephone and internet, which can be claimed in addition to the deduction for simplified expenses.

Are you looking for professional tech-savvy tax advisors and accountants in the UK to guide you? Contact us now!

Quick Sum Up

In conclusion, learning how to manage a rental business from home can be rewarding and profitable with the right approach. By staying organized, using effective tools, and keeping clear communication with tenants, you can make your rental business run smoothly from the comfort of your own home.

Remember, success in managing rentals comes down to planning well, staying informed, and adapting as needed. With these steps, you’re on the right path to managing a successful home-based rental business.

Disclaimer: The information about How to manage a rental business from home? provided in this article including text and graphics. It does not intend to disregard any of the professional advice.

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +
Reviews
0 +

Refer Clients & Earn Up to 10% – Join Our Reward Program!

Request A Callback