Renting out a property can be a great way to make money - but it can be an expensive business if you get it wrong.
Here are our top 10 money saving tips that will help landlords boost their rental profits.
1. Mortgage upgrade
Mortgage payments will likely be landlords’ biggest expense, so it’s vital that you’re getting a good deal.
We recommend regularly shopping around. There are more record-low mortgages rates available now than ever before, so fixing a low rate now could pay dividends when rates do rise.
If you're a Portico customer (or a potential customer) you're entitled to preferential private banking mortgage rates with Clydesdale Bank, plus £995 off the arrangement fee. Call us on 020 7099 4000 to find out how to set this up.
2. Trusted tradesmen
Finding a reliable tradesmen in London for less than £200 is pretty much impossible - trust us, we’ve tried!
That's why we took matters into our own hands and set up our own in-house handyman team. All our handymen are qualified, punctual and reliable - and you can book their services for as little as £42.50 + VAT, or at an even further discounted rate if you're a Concierge customer.
Click here for an instant handyman quote.
3. Combine annual tests
If you're a landlord, you're required by law to have an annual gas test, and it's best practice to have all electrical appliances PAT tested. This will set you back around £160 for both separate tests.
At Portico, our in-house gas engineers are actually trained in PAT testing too, so we can offer a combined annual test for just £95. (And we'll offer that to anyone - even if you're not a Portico client.)
Call us on 0207 099 4000 to book an annual test.
4. Making the most of tax breaks
Are you getting the most out of allowable tax deductions?
Many landlords don't take advantage of the allowances available to them, purely because they’re not aware of the rules regarding tax on rental income.
Every penny claimed as an expense reduces profits which means a lower tax bill. So it’s advisable to save all your receipts and account for every item of spend, even if it’s just a pot of paint.
Deductible costs (allowable expenses) cover a broad range of items, from letting agent fees and mortgage fees, to property repairs such as painting and decorating, fixing a broken cooker, and even replacing a broken roof.
Click here for a full list of allowable expenses.
5. Condensation & mould
Condensation and damp are extremely common issues in rental properties, especially during the colder months. Unfortunately most tenants will ignore the early signs, and the issue will escalate into a mould problem.
We advise all landlords to highlight potential problems when a tenant moves in, and also on regular inspection visits if they manage the property themselves.
It makes sense to ask your tenants to take the following preventative measures:
- Cover pans when cooking to prevent moisture, or make sure a window is open
- Ventilate the property by opening windows or doors whenever possible
- Make sure furniture items are not squashed against the walls to impede air circulation
It's also worth investing in a humidistat extractor fan. When your tenant turns off the light in the bathroom, the overide will stay on until the humidity has dropped, which is great for reducing moisture. You can pick one up for around £30.
If you opt for one of our managed packages, you can rest assured that we won't stand for mould! The second a tenant notifies us of a problem, we'll send one of our handymen over to get it sorted.
6. Don't underestimate the property management role
If you don't live near your rental property and choose not to instruct a letting agent, you're relying on your tenants to notify you each time there's a maintenance issue.
While this may be fine most of the time, if your tenants aren't very diligent, you may discover a string of maintenance problems right at the end of the tenancy - problems which have become much worse because they've been ignored.
Let-only landlords can also end up spending hours rushing here there and everywhere to sort out minor maintenance issues.
Our Comprehensive managed package is only a fraction more expensive than our let-only package, and it comes with peace of mind that your property will be thoroughly looked after throughout the tenancy, and returned to you in one piece.
7. Don't overspend on furnishings
It’s extremely easy to overspend on furnishings, especially if your rental property was once your own home.
That’s why we decided to commission a survey, to find out the best way to decorate a rental property to maximise the return on investment. We asked 1,000 people (each of whom were looking to rent, with a budget of approximately £400 per week) to choose their favourite reception room from a list of four. Watch the video above to see the results!
8. Don’t run the risk of arrears
If you don’t want to deal with the headache of late rent payments - or tenants who refuse to pay rent - it’s worth investing in rent insurance cover or a rent guarantee.
9. Avoiding the void
Void periods are the biggest concern for many landlords - though at Portico we’re proud to say we take an average of just 4 days to find a reliable tenant, (compared to the industry average of 28 days).
That’s because we have an in-house Renewals team who work tirelessly to keep properties occupied, ringing up tenants and landlords four months before the tenancy end.
You can also minimise your risk of void periods by synchronising your tenancy dates to take advantage of higher prices and shorter voids in summer. Read how to boost your rental income by 11 per cent without spending a penny here.
10. Do an inventory
An inventory is a document that outlines the condition of the property before you move in, and lists every item that is in the property.
Getting a proper inventory done is invaluable - to both landlords and tenants.
It’s important for the landlord as it outlines the standard the property needs to be in when it’s returned at the end of the tenancy, and it's easy to show if there has been any damage. If you attempt to do an inventory yourself, it may not stand up in court if the tenant causes damages then argues it was like that when they moved in.
But needless to say, if you let your property through Portico, you can relax and we'll take care of it all.
If you would like us to let or manage your property, or if you'd like further advice or tips, give us a call today on 0207 099 4000.
Click here for a free, instant property valuation!