How to cut your costs as a landlord

Contrary to what some of your tenants might believe, cutting costs is an essential element of a landlord’s work.

With tax regulations less than favourable and property prices rising, life as a landlord has come incredibly expensive.

However, there are legit ways to cut your costs – without compromising on your tenant’s living conditions (a big no-go area, as any experienced landlord will testify).

Through today’s post, we will now take a look at some of these ways to show how you can supercharge your property business.

Can you do the day-to-day management yourself?

One of the most significant costs associated with being a landlord is the use of a lettings or property management agent.

Whilst these professionals can save you an incredible amount of time and hassle, their fees can quickly add up – especially if you have a large portfolio of properties. In today’s market, you’ll be looking at paying at least 10% of your rent per month, if not more. Many agents also advertise their percentage charge, but add VAT to the small print – meaning that the costs are even higher for some landlords out there.

Consequently, it’s definitely worth considering whether you could manage your properties yourself.

Of course, this isn’t always possible – especially if you live far away from your portfolio. Let’s not forget that you’ll need to be on call 24/7, which for some landlords, isn’t practical nor desirable.

Are short-term fixes really cost effective?

When a problem occurs in one of your rental properties, your natural inclination might be to call out a tradesman to fix it as soon as possible.

After all, the last thing you want is for your tenant to be living in an unsafe or uncomfortable property.

However, over time, quick fixes can sometimes cost you a lot more. Papering over the cracks can result in much more expensive problems – and it’s here where you need to assess the long-term impact of any fixes that you do decide to make. Ask yourself if the issue in question needs a longer-term solution before making a rushed decision.

Do you need to insure every element of your property?

When it comes to property insurance, it can be very tempting to insure every element of your property – from the building itself to the contents inside.

However, unless you’re offering your property furnished, you’ll generally need just a standard landlords insurance policy. It is then up to the tenant to insure their own belongings within the property.

Could you get a better deal on your mortgage?

If you’re a buy-to-let landlord with a portfolio of properties, it’s highly likely that you’re paying a lot of money in mortgage interest.

With rates starting to rise, now could be a good time to review your mortgage deal to see if you could get a better rate elsewhere.

It’s also worth considering whether you could remortgage to release some equity from your property. This could give you a much-needed cash injection to help grow your portfolio.

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What Does it Take to Make a Great Landlord

As someone who has been both tenant and landlord, I wanted to write this piece for anyone who is considering letting out property to ensure that you are doing the best for yourself, your property and ultimately, your tenants. There are a lot of landlords out there who simply don’t do the best by their tenants and this can not only make your and their lives more difficult, but can also prevent you from finding tenants who are happy to stay long term which is the best solution for any landlord. Let’s take a look then at what makes a truly great landlord.

Business First

It is vital to remember that renting out property is a business and should be treated as such, it is not a hobby or something you do in your spare time. Because of this you need to ensure that you are professional at all times, the tenants are your clients and they should be treated as such. Make sure that you have secured both the property and the tenants with great landlord insurance, I like to use homelet.co.uk/landlord-insurance/, the choice is yours but make sure that you have sufficient insurance.

When it comes to payments and information that you need to give your tenants, ensure that they receive them in a timely manner, doing so will make it clear that you expect the same in return when it comes to paying rent.

Be Responsive

You are letting out your property as it has been shown to your tenants and if anything should go wrong with the property then you need to be on hand to find a solution. So many landlords that I have either worked with or that my friends have worked with have been painfully slow when it comes to responding to problems. If you want to be  a great landlord then you need to fix problems as soon as they arise.

Screening Process

The one thing that costs landlords more money than anything else is unpaid rent, trashed properties and midnight disappearing acts. You can never totally avoid the possibility that this could happen but you can reduce the chances by following a thorough screening process and use due diligence. Ensure that your prospective tenant has no recent evictions, no recent felonies and has good references from previous landlords, you should also be asking for 3 months rent up front to give yourself some peace of mind.

Be Respectful

You don’t have to like your tenants, you don’t have to be chummy with them or condone of their decoration choices, you do however have to be respectful. Many landlords see their tenants as though they are some kind of problem, this is not the case and as mentioned before, these are your clients. In order to have the best possible relationship with your tenants, ensure that you give them the respect that they deserve.

Be Ready

As a landlord you are going to need the help of several professional services and it is important that you are ready with contact details when the time comes. An emergency plumber, a heating engineer, steam cleaners or indeed, a letting agent are all numbers that will come in handy and you should try to strike up a bond with them so that they can come to your need when it’s required. You may also need to find out how to protect a vacant property for times when you don’t have a tenant.

 

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