At a time when costs seem to be constantly rising and the financial forecasts seem to be all doom and gloom, now is an ideal time for DIY landlords to review their portfolios and, where appropriate, adjust outgoings. This month Belvoir advises on some key areas to consider.
Mortgage review
If you have a BTL mortgage, make sure you talk to an independent financial advisor to check that you are on the best available deal. A reputable whole of market broker company will be able to shop around on your behalf and source the best deal to suit your circumstances. Whilst many landlords will undoubtedly be feeling the pinch as interest rates rise, mortgages remain a very affordable way to borrow money, and there is still a huge shortage of rental properties, so BTL remains a good investment.
Don’t forget that landlords are responsible for assessing their own tax, and as the rules often change, it is advisable to take independent financial tax advice to help navigate what can be quite a complex task.
Property maintenance
One area that landlords should not try and cut costs on is the maintenance of their properties. Landlords have a duty of care to ensure the safety of their tenants and all rental accommodation should be maintained to a high standard to ensure they are safe and legally compliant. Importantly, regular maintenance will help to retain the value of the property as an investment. A good agent will advise on what areas of property maintenance are the responsibility of the landlord, and which ones the tenant is responsible for. In addition, a comprehensive inventory at the start and end of a tenancy will help to avoid costly disputes when the tenancy agreement comes to an end.
Unless you are a DIY landlord with excellent property maintenance skills, and you can be available quickly to deal with any emergency issues that may arise, it is better to outsource to a reputable tradesman. Belvoir offices have lists of trusted tradesmen that can be relied on to deal with any issues promptly and efficiently, in a cost-effective manner.
Legal compliance
There are literally hundreds of regulations governing Buy to Let. Failure to comply with these regulations, which change regularly, can result in hefty fines. Don’t risk losing money or in the most severe cases of neglect, a prison sentence. If you are a DIY landlord it can be very difficult to keep up with fast-changing laws and regulations, and this is where a good agent can help to save you money and shoulder the burden. If you are uncertain of any areas of legal compliance regarding your rental property, telephone or call into the office of a professional letting agent and ask for some advice.
Rental reviews
Rents vary across the country, with some areas commanding high rents and other regions remaining much lower. Importantly, tenants are only able to pay what they can afford, and this is where an agent can really help to prove their worth, as they will know exactly what rents can be achieved in their area for particular types of property. In addition, comprehensive tenant referencing prior to a tenancy being agreed is an important way to ensure that tenants will be able to pay rents, and to help avoid costly legal disputes should circumstances change. A good agent will be able to advise on insurance packages to help avoid expensive legal costs or loss of rent should the worst happen and a tenant stops paying rent for some reason.
Time management
When calculating your outgoings as a landlord, don’t forget to factor in the cost of your time. How much time are you spending on sourcing tenants, carrying out inventories, dealing with maintenance issues, checking rental payments and all the other tasks that come with being a landlord? Do you realistically have enough time to do these jobs properly? This challenge becomes even more difficult for landlords who own several investment properties. It is true that time is money, and this being the case, it can be a real money saver to outsource some or all of these vital tasks. If you are a DIY landlord who has previously dismissed the thought of engaging an agent because you automatically thought that the costs outweighed any benefits, it may be time to reconsider. Agent fees are tax-deductible, and the time and money saved can make a real difference to the profitability of your business.
