Landlords are still reeling from the effects of the recent tax changes which significantly reduced the level of profit that can be made from buy-to-let investments going forward.
With so much bad news for landlords lately, we’ve opted to press on with our usual optimism and have put together a list of 5 ways you can cut costs. Now is an excellent time to put some of these top tips into practice;
Review your rates
The gap between supply and demand is nowhere near bridged. As a landlord, you have some measure of control over your revenue especially in the face of the recent tax changes.
Check what the going rates are at the moment for your kind of property and if there’s room to do so, make the necessary increase to cushion the effects of the tax changes. However, ensure that you are not violating the law and consider whether the increase is worth the risk of losing your reliable tenants (if you’re lucky enough to have them!)
Revisit your buy-to let mortgage
Check with your mortgage lender for cheaper and more flexible products. Mortgage lending is now more competitive than ever and lenders are offering new plans to entice and retain customers.
Keep up-to-date with latest developments with repayment rates such as the recent reduction of the base rate from 0.5% to a historically low 0.25%. Check with your mortgage lender to know whether you are eligible for the reduction. If you don’t ask, you definitely won’t get.
Market Your Property in the Right Places
There are many people looking for property to rent or buy. To get yours seen by the multitude of house hunters, you will need to be where people are looking.
Today’s renters now use the internet to make searches for homes, and there are many reasons for that:
- They have the extra security and assurance looking in places where others are
- Some are looking to deal directly with landlords and avoid estate agents
- They can easily access information such as previews, prices, location, and reviews from wherever they are.
Prominent property marketplaces like The House Shop where landlords, agents, home buyers, renters and independent property experts meet is a great place to check.
Choose your letting agent carefully
If you will be using a letting agent to manage your property, you need to put in more effort in deciding who you trust your property with.
- Are they a member of any of the professional letting agents’ bodies such as ARLA, NALS, RICS or NAEA?
- Have you defined the specific roles you want the agent to play?
Remember, if you have the time and expertise, it is always better to manage your property yourself and this will save you lots of money over the years.
If not, you will need to do detailed background check on the agent that will manage your property.
Some checks include:
- Ensure that the agent belongs to a deposit protection scheme.
- Ensure that the agent has professional indemnity insurance.
- Ensure that you fully understand every word on the contract you sign with the agent. Read all the fine print; get help if there is something you don’t understand.
- Conduct periodic checks to ensure that the agent is carrying out their responsibilities. Things like maintenance, safety checks, regulation compliance within the property should be enforced.
- Check with your tenants every now and then to ensure that the agent is not making your property unattractive through their conduct.
Choose Your Tenants with Care
Remember that you can’t evict a tenant at will. Take care to run detailed checks on a potential tenant. If you are using an agent, go through the checks with them. If a tenant doesn’t feel right, it is better to avoid them.
Some tenants are habitual debtors. Some are insurance fraudsters. Others will bring all the wrong kind of attention to your property.
Being a landlord in the UK may no longer be as lucrative as it once was, for now at least, but you can still use these tips to get great value out of your property.