During last year’s Summer Budget, Chancellor George Osborne announced a number of impending changes within the rental market. One of these changes is the reduction of Mortgage Tax Relief for residential landlords to the basic rate of income tax (20%), with the first phase coming into force from April 2017.
From this April, landlords will also no longer be entitled to a wear and tear allowance for furnished properties. The current system enables landlords to claim 10% but under the new rules, they’ll only be able to deduct fees they actually incur.
Many landlords are concerned about the impact the new regulations could have on their income streams. In any case, as a landlord you should seek to make cost-savings wherever possible, so long as it doesn’t negatively impact the service you provide or the relationship you have with your tenants.
If you’re keen on saving yourself some money (who isn’t?), here are some tips:
If you are looking to buy a property to let – whether it’s your first or third – there’s one factor you need to consider over all others: location. Obviously, certain areas enjoy notably high rental yields – a mere few metres could mean the difference between being able to charge £600 per month for a property or £850 per month.
When comparing similar properties, don’t just look at the price – take time to calculate potential yields and make your decision based on this. Online property websites can give you a good idea of where rental hot-spots are.
You’d be wrong to assume that ignoring essential repairs will save you money. On the contrary, ignoring or refusing to carry out repairs suggests to tenants that you don’t particularly care about their welfare. And if you don’t care about them, you can’t expect them to care about you or your property.
Check possible tenants
Always do your groundwork so you can be sure possible tenants won’t give you trouble later down the line. There are a number of ways you can carry out tenant checks, and gut instinct will only get you so far. Additional measures include: conducting credit checks, getting possible tenants to fill in application forms, and asking to view a possible tenant’s current accommodation so you can get an idea of how they live.
Get the right person to do the job
When you’ve got essential work that needs to be carried out on your property, don’t just settle for the first tradesman that pops up on Google. Ask landlords for recommendations and make use of review sites such as RatedPeople. This will help to ensure that any work carried out is of high-quality, and that you’re not paying over the top for it.
Find the right insurance
It’s really important your landlord’s insurance provides thorough cover and will pay out costs in the event of an incident which results in you making a claim. Having quality insurance could save you thousands of pounds in the long-run – use a broker to make sure you is getting the right level of cover for the right price.
By taking just a few simple steps, you could save hundreds of pounds a year and maximise your property investment.