When times get hard should you, as a landlord, change your investment strategy? Certainly, this can make sense, especially if the market changes. So, what are the best current property strategies around for landlords right now? Well, we list them in this article:
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Consider Switching to an Online Letting Agent
The majority of high street letting agents charge from 10 to 14% of your rental income for providing management costs. Go online though and you could have a low fixed cost which helps you budget better.
Re-Mortgage for a Better Deal
Base interest rates are super low right now, which makes it the idea time to re-mortgage is your last deal was carried out a number of years ago and is based on a higher base rate. You’ll also have more equity in your property to put down as a deposit.
Becoming a Company
Could changing to a limited company make more financial sense than being a sole trader? For some portfolio landlords they can save quite a bit of cash by paying corporate tax, instead of income tax. However, remember you’ll be hit by capital gains tax initially when you sell your property and buy it back as a business.
Upgrading Your Property
Having a property with a higher spec means you’ll be able to increase the rent. Certainly, if you’ve been having a lot of void periods recently then this could be the answer – even just to get it up to standard! What tenants are prepared to settle for changes as time moves on.
You don’t even have to refurbish or fit a new kitchen or bathroom. Even just a spot of decorating can make a big difference, together with a change of window dressing and adding a few more appliances, such as a coffee machine or steamer.
Switch to Short-Term Lettings
This means renting out your property via Airbnb or similar ie for holiday lets. Although these are for a shorter period ie over summer or the Christmas holidays, you can charge a far higher rate – and which could go some way towards making up for void periods.
Use Your Full Tax Write-off Entitlement
Making sure you claim for everything you are due as a landlord can really help cut back on your annual tax bill. The kind of things landlords often miss out on are claiming heating and lighting in their own home which they use as an office. Other write offs include a portion of your phone and internet bill, as well as subscriptions for work-related magazines. Remember to always claim for repairs and maintenance too.
Reward Loyal Tenants
If you have tenants who always pay their rent on time and never cause you any problems then let them know you appreciate them by always attending to repair requests immediately and checking things are alright (especially during lockdown).
Work Out Your Target Tenant
It really doesn’t make sense to invest in a buy to let unless you work out who your target tenant market is going to be first. That’s because you’ll want to tailor the property to them in terms of location, size, cost, décor etc. If its students, you’d be better buying within walking distance of a university or college. If it’s a family you want to attract then make sure there’s a good school nearby and a park or two. Young professions will normally want to live in a ‘buzzy’ area with plenty of bars and restaurants to socialise in.
Consider a Rent Guarantee Package
This type of landlord insurance protects you against void periods. It means you’ll continue to receive rental income, even when you don’t have any tenants in your property at the time.
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