Personalised business insurance
The current economic climate is taking its toll on individuals, families and businesses alike – and landlords are no exception.
After carrying out two surveys to see how buy-to-let landlords have been affected by interest rate hikes and soaring mortgage rates, we found that:
- Interest rates are one of the three biggest concerns for one in five landlords
- 58% will have to seriously consider selling their leased property if interest rates rise further.
So what can you do to protect your rental yield and meet mortgage repayments? Here we outline seven cost-cutting solutions that could help landlords save money – as well as some things you shouldn’t do.
1. Learn essential maintenance skills
All properties require upkeep, and it's estimated that landlords should spend around 1% of the property’s value on repairs each year. While 1% might not sound like a lot, this adds up to nearly £3,000 a year for the average UK property.
An easy way to keep your maintenance budget in check is to get more hands-on and learn some essential maintenance skills like unblocking a sink or doing a basic paint job.
On the other hand, it’s important to know when to bring in an expert. Some jobs simply call for an experienced professional – and trying to take them on could lead to an accident or make the problem worse and more expensive to fix.
2. Help your tenants help themselves
As well as teaching yourself a few key skills, you may find it helpful to give your tenants a bit of guidance.
A how-to guide on things like bleeding the radiators and checking the fuse box can save them from calling out a property manager or tradesperson (and save you from footing the bill).
3. Claim everything you’re entitled to
Allowable expenses are costs that can be deducted from your income so you only pay tax on the remaining profit. And as a landlord, you can claim a number of expenses including:
- Maintenance and repair costs
- Insurance premiums
- Ground rent
- Fees for accountants, property managers, cleaners and tradespeople.
While many landlords are unaware of what exactly counts as an allowable expense, others simply forget to claim everything they’re entitled to – ending up with an inflated tax bill.
To make sure you don’t pay more tax than you need to, get familiar with the expenses you can claim as a landlord, then report all your costs when you complete your annual tax return.
4. Invest in getting the right tenants
It’s sometimes said that, after the property itself, a good tenant is a landlord’s second most valuable asset. A good tenant will pay rent on time and treat your property with respect, while a bad tenant can miss payments, upset the neighbours and cause damage to furniture and fixtures.
But how do you go about finding the right tenant for your property? Referencing is the most reliable way to make sure you let your property to a responsible tenant – but most referencing services come at a cost. This might seem like something you can cut back on to save money, but skipping referencing can lead to bad tenants that end up costing more you far more than the referencing fees.
5. Evaluate your landlord insurance
As a landlord, the risks you face change over time, so you should be proactive about making sure your landlord insurance is up to date and meets your changing needs. And in today’s uncertain economic climate, it’s even more important to keep on top of this.
Think about your existing insurance policy and whether its covers, limits and excesses are suitable for your current circumstances, as well as the risks you’re likely to face in the foreseeable future.
For example, if your property has dropped in value since taking out insurance, you could be paying too much for your cover. On the other hand, you might have chosen limits that are too low and could leave you out of pocket in the event of a claim.
With Superscript, you can adjust your policy at any time – without fees. So you’ll have peace of mind that you can keep your cover up to date throughout the year, without overpaying. And with Superscript, you can pay for your landlord insurance annually or monthly based on what works best for you.
6. Use review sites
These sites can help you figure out whether someone’s services are good value for money, or whether they’re likely to cause problems that could be expensive to fix further down the line.
7. Make use of templates
The internet is full of free resources that can save you time and money. For example, rather than forking out for someone to draft a rental contract from scratch, you could use the government’s model agreement for a shorthold assured tenancy. Just make sure you read the guidance on its use and clauses.
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.
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