How reviewing your portfolio can earn you £100’s
1. Review your property insurances annually. Buildings and contents insurance is a highly competitive market and making sure you have the right cover at the best price is essential for every Landlord. Make sure you have adequate cover for the property being let out and make sure you are aware of any restrictive clauses that may stop you being able to claim. Go for a specialist Landlords’ policy. By spending an hour shopping around can save hundreds of pounds a year. If you are looking to review your insurance soon, we recommend speaking to the following companies: Ian Batemen of Eastside Insurance, Swansea: 01792 641624 or Homelet: 0845 111 2222
2. Review your mortgage products 6 months before they expire. Interest rates are still looking to remain low for some time and there are some great BTL options around. By getting independent mortgage advice and avoiding your mortgage falling into the standard variable rate can save you hundreds of pounds in additional interest fees a year. An independent advisor will be able to give you options for all the major and lesser known lenders so you can really pick the product that best suits your needs. Now is the time to be fixing your rate and planning for the next 5 years whilst the rates are low. We recommend speaking to Trevor Jones of Just Financial Mortgage Services: 01792 894226
3. Review the rental income you are receiving. Do you have a long term tenant? Are they paying under the market value? By reviewing each property and each tenancy annually, even a &25.00 increase per month in rent will bring an additional &300.00 income in per year on that property. Important note: Rent reviews should not be done frequently and should be in line with local market values. Generally increasing the rent by more than &25.00 per month may result in the tenant wanting the leave; it’s not worth risking losing a good tenant as it will cost more to have an empty property and to pay for a new tenancy!
4. Plan for tax. No-one likes paying tax, but you certainly don't want to be paying more than you should do! No matter how small your income all income must be declared by law to the Inland Revenue (HMRC). Make sure you use the services of a specialist tax planning & advice from a regulated and qualified chartered accountant (you can off-set their fees against tax too!) By getting specialist advice to your personal circumstances, a tax advisor should be planning for your future tax liabilities and looking to reduce them rather than just telling you how much you owe at the end of each year. - Do not get caught short of the major changes coming into effect in April 2016! We recommend speaking to Martin Hudson, Director at Morgan Hemp Accountants, Swansea: 01792 466428
5. Be organised and systematic. Treat renting your property like a business and systemise it; Keep all receipts, no matter how little of an amount to potentially off-set against tax at the end of the year. Keep clear records of every property inspection, check in and check out reports, conversations, a record of all your contractors and have copies of their professional indemnity insurance up to date and if you have more than one property- paint them all the same colour (so you can remember what colour they are)! Keep an excel spreadsheet of your cash flow, so you always know where you are with your finances.
6. Regularly maintain your property, don't leave it until something breaks down! Annual servicing boilers, cleaning gutters and regularly reviewing the property's maintenance needs will not only keep tenants longer (as they can see you are caring for their home and they're not being inconvenienced with problems) but also keeps unexpected and expensive costs to a minimum. Plan to renew kitchens, bathrooms and boilers every 10-15 years. By keeping &50-&75 a month aside for large expenses will ensure that when the rooms need to be renovated you have the cash flow in place to cope with it.
7. Plan to refresh the property at the end of each tenancy. By giving your property one coat freshen up of paint and a professional clean will ensure you get the best rental income, to the best tenants and new tenants will want to stay longer. The life of your carpets and appliances will last longer and you will be minimising the need for expensive one off full redecorations.
8. Use the services of a managing agent. By using the services of a managing agent, you could save hundreds of pounds a year in lost work time and in making costly avoidable mistakes. If your time is more profitable being spent doing what you do best, then investing in a managing agent will make you more money than what you will spend on their fees. A good letting agent will take the day to day hassle of organising of maintenance, contractors, speaking to tenants, Costly mistakes are avoided, such as forgetting to check the rent is in on time, has the deposit been submitted correctly along with the prescribed information. A good managing agent will be ensuring maintenance is prevented rather than having unexpected costly bills by organising regular inspections of the property. A small leak caught in a few weeks vs left for a few months can cause more damage to your property than you can imagine. Difficult tenant causing you stress? Even the best tenant on paper may rub you up the wrong way with their constant demands, a good letting agent will be trained on how to deal with difficult situations and negotiate the best outcome for all parties, leaving you stress free! A good letting agent will also have invested into a software system that should be compliant with client accounting, but also for recording important conversations, recording what maintenance has been instructed and authorised. And you can off-set their fees against tax too!
If you want to speak to a professional, dedicated letting agency who can help you to maximise the profits on your property investment, call us today on 01792 430100.