Some people think the only way landlords can make more profit is to ruthlessly keep hiking up their tenants’ rent.
But that’s incorrect on two fronts. Firstly, continually increasing a tenant’s rent is no strategy to keep them long term. Secondly, the five ways we’re about to share with you can increase your bottom line without being mercenary.
- Review your mortgage rates – regularly: Start by lowering your biggest regular cost – your buy-to-let mortgage. It’s possible to secure a new mortgage six months before the end of your current fixed term. So, if any of your properties are coming up for renewal in spring 2022, start researching the mortgage market now.
- Look into going limited – Tax changes affecting landlords in recent years have meant many are putting their rental properties through a limited company. There are several tax advantages but it’s usually landlords with medium to large portfolios who benefit from this approach. A good accountant can advise you on whether this strategy would work for you.
- Keep good tenants – Another good reason not to hike up rent every time a rental agreement is up for review is that it can end up with good tenants moving on. A tenant who pays on time, looks after your property, and is respectful to others is valuable to a responsible landlord. A four-letter word that leaves landlords chewing their nails is …void. A void period where your property is empty eats into your profits like nothing else – long-term tenants help you avoid this and any other set-up costs.
- Let it go – Some landlords take the DIY approach to lettings and want to do everything themselves. And while this may work for some, others find all the legislation, tenant liaison, and dealing with issues time-consuming and costly. A good letting agent will take care of all that for you, allowing you to get on with your life and have time to look at other investment opportunities – which leads us onto the fifth point.
- Grow your portfolio – A competitive buy-to-let mortgage market and soaring rental demand creates more opportunities to grow a portfolio and in turn, increase profits across more properties.
We’re here to help landlords in Chelmsford gain a better return on their rental investments. To find out how we do that, contact us today.