Are you a landlord? If you are, it is likely that you purchased a buy-to-let property to increase your income.
As with any real estate investment, rental property is one way to improve your finances, whether you’re a landlord full or part-time.
But here’s the thing. Making a profit from a buy-to-let isn’t always a given and this is largely thanks to maintenance costs, property management fees, and tax burdens. You will understand this already if you’re currently renting out one or more properties. Still, it is possible to improve your earning potential so let’s consider how you might go about this.
#1: Keep on top of any maintenance issues
Not only will you keep your tenants happy if you keep on top of maintenance issues but you will profit yourself too. There are a number of reasons why.
Firstly, you will prevent issues from getting worse and potentially more costly, so getting to them early is a must.
Secondly, you will keep your tenants if your property is well-cared for so you are less likely to experience payment gaps through lost tenants.
And finally, you will escape the cost of legal fees if you adhere to all health and safety regulations. When your property conforms to high safety standards, you will have peace of mind and so will your tenants. And with evidence to prove it, such as an electrical installation condition report (EICR) – you can learn more about that on this page: what is an EICR – you can attract more tenants too. An EICR certificate is so important to continue with your property safely.
#2: Remortgage your property
You can usually secure a new mortgage six months before your current mortgage deal ends so it pays to shop around. If you fail to make the switch, you will typically be put on the lender’s variable rate, and this will be more expensive than the fixed deal you were on.
Start shopping around for a new deal early and perhaps seek the services of a no-fee mortgage broker as they will help you get that better mortgage deal.
#3: Consider short-term lettings
Many landlords are making the switch to short term lettings to escape some of their tax burdens. Using sites such as Airbnb, they are renting out their properties as holiday homes. This allows them to charge more and make more of a profit.
This could be an option for you although you would need to speak to your mortgage lender in advance of any change.
There is more advice here on switching to short-term lets so have a read and consider the pros and cons.
#4: Reduce your management costs
If you’re a full-time landlord and you live near your properties, it might be that you don’t need to hire a property management company at all.
You would need to ensure the relevant inspections and repair jobs were carried out, of course, so you should think carefully before dropping your property management company. However, it could be profitable for you if you don’t need to rely on their services.
The alternative is to switch to a different property management company as there could be those that charge lower fees. If you also make a shortlist of the services you do and don’t require, you could also lower your fees if you don’t fork out for a full service.
Finally
These are just some of the ways to increase your profits so consider each suggestion to improve your finances. There are bound to be other things you could do so continue your research online for advice on maximising the returns on your buy-to-let portfolio.
