A rental property is an investment that can generate revenue for you, year on year. However, with the ever-increasing costs associated with living, as well as rising rates of inflation, you’d be best informed on what to do to ensure you continue making a healthy return of profit from your investment.
Tenant Referencing & Compliance Checks To Maximise Rent Income
Referencing your tenant and doing the relevant checks to ensure all parties are in the clear is an important starting point.
Most landlords will either choose the cheapest agent to go with or give it to multiple agents to market simultaneously. Both of these can cause you frustrations in the future, as well as hitting your profits where it hurts!
Choosing the cheapest agent is like buying something from a wholesale website being shipped from China or Russia, it’s cost-effective, but the quality or longevity doesn’t usually reflect that. If an agent is cheap, you’ve got to wonder where they’re cutting costs. With cheap and inexperienced negotiators? Not investing in the property tools to do in-depth referencing?
Or by using multiple agents to list your property… It’s in the agent’s best interests to find you a tenant, ideally as best a tenant as possible. In the majority of cases, this could be looked at as an oversight, as the agent may rush their search and checks in order to be the first one to secure your business.
Allowing your agent time, even if it’s an extra day, so as not to have to face the pressure of being the first one at the finishing line could make all the difference.
Record, And Declare All Your Expenses Relating To Your Rent Income!
Submitting tax returns is a normal part of owning a property, as the rent income is classed as taxable. However, ensuring you keep track and records of the expenses you’ve spent on repairs, maintenance, and other aspects relating to needed expenditures on the property.
Ensuring you submit these to HMRC may allow you to pay smaller amounts of tax on taxable rent income, as it was in relation to the property and its maintenance or upkeep.
After all, legally being able to pay less tax is always a win, right?!
The market is forever changing, and a letting agent will always be in tune with this. But just in case they aren’t, keep an eye on the rental market. Jump onto Zoopla or RightMove and check out what similar properties to yours are asking for in rent income in the current climate.
You may be able to implement a rent income review for your tenancy and impose an increase in line with the current market. An increase means a jump in your profit margin!
Regular Inspections, Keep On Top Of Them!
Regular inspections you say?
Yes, inspect the property and pay attention to all aspects in every room. Spotting and resolving an issue early means you could potentially avoid it getting worse and inevitably the bill being a lot more expensive!
So, it’s either sorting issues early and paying less, or leaving it to do worse damage and having to pay more?
Bit of a no-brainer, don’t you think?
“Oh, I can’t afford to pay a 12% management fee every month”
In most cases, no, that isn’t the whole truth. Landlords see “12%’, and see £144 come off of their £1200 rent income. But look at the bigger picture…
Property management is a minefield of compliance that is best left to the professionals anyway. 12% for someone to overlook all the aspects of the tenancy and property management is a great deal.
It means it gives you the time and flexibility to best utilize your time, resources, and money towards other investments that could open another avenue of recurring incoming for you and your family.
There are probably a hundred other points I could make about cutting costs and saving money. Such as shopping around different contractors for quotes on repairs and doing the bookkeeping yourself. But those are obvious, even to someone that doesn’t own a rent income property.
The points I made above, referencing and compliance, keeping track of expenses, rent reviews, and inspecting properties regularly are things that are overlooked by new landlords.
Ensure you’re doing what’s right for you, your family, and your lifestyle. And the right choices made alongside should make your life easier.