Landlords: Are you maximising your rental investment?
Property has always been seen as a great investment opportunity, with landlords reaping the rewards of a regular and steady income as well as proving to be a great long-term investment due to property and land prices generally increasing over time.
It is even more prominent in today’s housing market where since the beginning of 2018, we have seen the supply of properties available to let decrease, due to many of the properties being sold by the owners, while the level of prospective tenants that are in the market for a property to rent has remained relatively high. This balance of supply and demand points towards rents continuing to climb over the next few years, which would mean your return on investment would outperform many traditional investments.
So, through careful planning and working with a letting agent to receive professional and practical advice to ensure the correct rental figure is set from the start, reliable tenants are found within weeks and moved in within a month of a holding fee being received, there is still plenty of scope to ensure your rental property investment performs to the best of its ability, if not exceeding your expectations.
We are regularly asked the questions below and have put together the following advice to help guide landlords with their investment properties and maximise the value of the rental property income:
Am I getting the right rental income for my property?
We would recommend carrying out an annual rent review to ensure that you are getting the right return on your investment. You should take into account current market conditions and compare your property against similar ones in the area to assess whether you are charging the right amount.
How can I beat the buy-to-let tax clampdown?
Under new reforms introduced in April 2017 under Section 24 of the Finance (no. 2) Act 2015, which are slowly being phased in over the next 4 years, mortgage, loan and overdraft interest costs will no longer be considered in calculating taxable rental income. This means landlords are no longer able to deduct the full cost of their mortgage interest payments on their rental properties before they pay tax. By 2020, all landlords will be charged tax on their overall income and receive a 20 per cent tax credit instead.
For those looking to continue claiming tax relief on their mortgage interest payments, we recommend speaking to a tax expert about switching to a Limited Company. Particularly those looking to increase their portfolio and benefit from the predicted increase in rent over the next few years.
How do I know if I have the right mortgage for my buy-to-let property?
Your mortgage will be one of your largest expenses as a homeowner, so it’s important to make sure you have the right one for your property and your circumstances. New products are being introduced all the time and competition is high between lenders right now, so there will be some great deals up for grabs.
We work with an independent mortgage advisor Richard Mansfield, who is happy to sit down with you and have an initial chat to review your options; this could save you money or at the very least put your mind at ease. To arrange a chat, call Richard on 01903 219 992 or email email@example.com.
How do I choose the right insurance for my buy-to-let property?
Making sure you are covered from the unexpected and insuring your rental property could save you thousands in the event of an incident or accident. It’s important to have the right cover for your property; one that is designed for rental properties and landlords that will protect you from any eventualities, from damaged curtains to a broken boiler.
If you already have insurance in place, it may be worth reviewing your policy to ensure that you have the right cover and to check that it is delivering value for money. We all like a good deal but be sure to read the small print before signing up.
In addition to insurance, it is highly recommended that you employ a letting agent or professional clerk to carry out a detailed inventory / schedule of condition. In doing so, this avoids any discrepancies at the end of a tenancy. Plus, if you are not already aware, as of 2013 it became mandatory for all landlords and letting agents to ensure a tenant’s deposit is put in a government-backed tenancy deposit scheme (TDP). In addition, all deposit deductions must be agreed between tenant and landlord, which where having an inventory/schedule of condition is beneficial.
How can I find good tenants and keep them?
Searching for tenants yourself as a private landlord can be time-consuming and this is a great benefit of where we can help as we have a large pool of tenants waiting for a property just like yours.
Conducting the necessary searches, asking the right and appropriate questions will give you (or us) a good understanding of the potential tenant and whether they fit with the landlord and property.
Regular inspections of your property will allow you to stay on top of any maintenance issues before they escalate and ensure your property is kept in good decorative order while also reassuring your tenant that you are looking after their needs. As part of our fully managed and executive service, we send regular reports to our landlords to ensure they are kept informed of the condition of the property and anything that requires attention.
Am I best using a professional letting agent or go it alone as a private landlord?
A large percentage of our existing landlords live locally and enjoy the peace of mind that instructing us to look after their property gives them.
Using an expert lettings agent can save you time, money and stress in a number of ways:
- Extensive Marketing – as a lettings agent we ensure suitable tenants are sourced quickly so that potential void periods are kept to a minimum and maximum rents are achieved.
- Maintenance Issues – using an online reporting system we are able to deal with any issues quickly and efficiently reducing the need for unnecessary and costly callouts. The system ensures that serious out of hours issues can be resolved, particularly over weekends/bank holidays.
- Legislation Changes – with regular additions and changes to Housing Act Legislation, it is important to have an ARLA registered Letting Agent like ourselves ensuring you and your tenant are covered at all times.
- Rent Reviews – it’s important for there to be regular rental reviews of your property and implement rent increases where necessary.
There are still decent returns to be found in property for the committed investor and now more than ever is the time to engage a professional letting agent to look after and maximise your property investments.
If you are interested in receiving further advice or having exclusive access to new and attractive investment opportunities as they come onto the market, please contact Sam on 01903 756 688 or email firstname.lastname@example.org.
Content accurate at time of publishing.