How To Save Money And Increase Your Profits As A Landlord
Whether you’re a new landlord or an experienced rental property owner, you’ve probably been hit with some unexpected costs at one point or another.
Any month has the potential to bring with it costly repairs, unpaid rent, or any other number of issues.
You know all too well how increasing profit margins as a buy-to-let investor can be a slow process. The last thing you need is extra costs making the process even tougher.
Thankfully, you can boost your profits, save money, and get the most from your rental property by taking some simple steps.
Check out our list of four simple steps below!
How to save money as a landlord
1. Carry out tenant screenings
Tenant screenings aren’t just a great way to save money – they offer peace of mind.
Troublesome tenants who miss their rent payments or cause damage to your property can cost you significant money and stress.
When you vet tenants, you can rest assured they’re trustworthy renters who will treat your property respectfully and make their rent payments on time.
At the same time, it’s important that you ask tenants for a security deposit ahead of their moving in. This offers you financial security for any damages that may take place to your property.
2. Use your expendable allowances
As a private landlord in the UK, there are several expendable allowances you’re entitled to.
An allowable expense is anything that will be used exclusively to rent your property. These allowances offer a way to reduce your tax bill and save money significantly.
Some examples of allowable expenses include:
- Repairs and maintenance costs
- Water rates, council tax, gas, and electricity bills (if paid by you)
- Property insurance
- Cost of services, e.g., cleaners, gardeners, ground rent
- Tax relief on mortgage interest
3. Focus on energy-efficiency
Another great way to save money is by installing energy-efficient appliances and light fixtures throughout your property.
When you take this step, you’ll save money on your monthly electricity bills. What’s more, you’ll do your part to help the environment.
4. Catch problems early
Maintenance issues are almost unavoidable when you’re a landlord. But if left untreated, some seemingly minor issue can quickly become a bigger problem.
This is why always acting fast when tenants report an issue is crucial. If not dealt with promptly, something like a small leak in the bathroom could end up causing significant ceiling damage to the room below.
How to increase your profits as a landlord
Here are four simple steps to increasing your profits as a landlord.
1. Consider location
Many buy-to-let investors who purchase their properties locally see great success. When you purchase a property outside your area, it means buying in a market you don’t know – you risk overpaying for a property or buying in an undesirable area.
When you buy close to where you live, you benefit from local knowledge, and you’ll be able to keep an eye on the property and be on hand to deal with any tenancy issues.
2. Keep your tenants happy
As we know, finding tenants that respect your property is essential. But it’s just as important to show your tenants respect in return.
Void periods (where the property is empty) can equal disaster for your income. When you’re lucky enough to find good tenants, you want to ensure you keep up your end of the deal.
This means being proactive with any required maintenance and contract renewals. By carrying out your landlord duties effectively, you increase the chances of your tenants sticking around.
3. Get the right mortgage
It’s important to understand that a mortgage for a buy-to-let property differs from a residential mortgage. A residential mortgage only applies to a property you plan to live in yourself.
Although mortgage rates on buy-to-let properties can sometimes be more expensive than residential mortgages, don’t mislead or deceive the mortgage company. This will constitute fraud and can lead to costly legal troubles.
4. Consider a smaller property
Smaller properties make ideal rental properties and are very attractive to renters waiting until later to purchase their own homes. At the same time, smaller properties have lower costs for repairs and renovations.
From securing suitable tenants and keeping them happy to finding the right location to purchase your property, you can take several steps to save money and boost your profits as a landlord.
Make property management easier with Symple
At Symple, we’re here to help take some of the pressure of your landlord responsibilities off your shoulders.
We offer a platform where you can manage all your property inspections and certificates in one place.
With all your certificates taken care of, you’re fully protected from costly fines or legal action that will take a financial toll.
You’ll never have to worry about arranging another inspection appointment, chasing after tradespeople, or forgetting to renew your certificates.