With tax changes starting to hit some landlord’s profits and a continuous raft of legal changes, often requiring additional investment from investors, many landlords would benefit from making sure they are maximising their income to ensure profits are maintained.
Here are six hints and tips to help you protect your monthly profits, now and in the future:
Can you reduce your mortgage costs?
If you haven’t reviewed your costs recently, you may find you can make some savings here as mortgage payments are likely to be your biggest monthly cost and lenders often review their rates every quarter. Buy to Let finance is quite a competitive space currently, so it is worth speaking to a broker to find out whether you could be on a better product for your personal circumstances. With all the uncertainty surrounding Brexit, do seek advice about whether it is worth considering a fixed-rate deal, to give you some certainty for the next few years and protect you against any Bank of England base rate rises.
Davis Tate have partnered with Embrace Financial Services to provide you with access to expert mortgage and protection advice that is tailored to your needs.
Our financial advisers can offer specialist buy-to-let financial advice and find mortgage deals to suit you, and maximise the return on your investment.
Embrace Financial Services will listen to your needs and then provide with details of the best products for you.
They have access to 1000s of mortgage deals from 100s of lenders, including well-known high-street providers. These often include exclusive deals that cannot be accessed by going direct to the lender.
Our advisers are flexible and can meet in a location that's suitable for you - whether that's in one of our offices, or in your home.
They provide excellent communication and will stay in touch every step of the way.
Contact your local Davis Tate branch to make an appointment with your local Financial Consultant for a free, no-obligation review.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Embrace Financial Services usually charge a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
Review your Insurance costs
In addition to mortgage costs, check to see whether you could reduce your landlord insurance bill. As with any insurance, if you tend to let it automatically renew every year, you might not be on the best available premium, so it’s worth a review - particularly if you have several properties. If you have more than one property, it may be worthwhile considering a portfolio policy as this may reduce your overall costs and will certainly make your admin easier. We do offer insurance cover and might be able to help reduce your costs, do get in touch.
Manage your maintenance costs
If you have a few properties and use different local contractors for cleaning, gardening and other maintenance, it’s worth investigating whether you could reduce costs by using a bigger regional or national company to provide those services. Alternatively, you could consider upgrading your service level to a fully managed service, so that Davis Tate manage this for you. To find out more about this contact your local Davis Tate branch.
Could you increase your existing tenant's rent?
If you have a good, reliable, long-term tenant, you may not want to rock the boat, but a rent increase every one or two years is not unreasonable; bear in mind that social housing rent has historically increased rents in line with inflation, so do have a think about when the last time was you increased your tenants rent.
The extra income can help to fund redecorating of the property for the tenant or indeed go towards a more efficient boiler, helping overall to reduce your tenants housing costs.
For example, the latest inflation figures for 2018 show the general cost of living increased by over 2%, so if your rent and costs have not changed over the last 12 months, you’ve had a real-term drop in income.
If you haven’t increased rent in line with inflation since 2015 and used to charge an average of £650 per month, to keep rental income in line with inflation, today tenants should be paying £702, which is just over £50 additional income per month.
Our Davis Tate experts are here to advise you on a fair market rent for your property. So, to check whether you could increase rent for either a re-let or an existing tenant – and, importantly, to find out what steps you need to take to do that legally – simply contact local Davis Tate branch and one of the team will be happy to help.
Spend to earn
Unlike traditional financial investments, property does require you to inject additional capital every now and then. The good news is that spending money on improving your property tends to be reflected in either the capital value or monthly rental income - or both!
New builds are appealing to tenants, so look at whether refurbishing your property could help attract better-off tenants who would be prepared to pay more. If your existing tenant is planning a holiday, ask them whether they would be interested in you updating the property while they’re away, in return for a small rent increase. And remember that even if you can’t immediately increase rent for your current tenant, when it comes to reletting, a property in tip-top condition will let much more quickly than a tired one, meaning you should avoid the ‘hidden loss’ of a void period.