Many people hoping to rent out a new property they bought or inherited can be surprised by the costs. Expenses are an inevitable part of owning property, but these costs can easily add up and overwhelm new landlords. Gov.uk estimated in 2018 that 61% of landlords had gross rental income of less than £20,000, and MakeUrMove estimates that 40% of landlords have only been a landlord for three years or less. Many new landlords struggle with the unexpected costs of their role. In this guide, we break down 5 ways landlords can save money without cutting corners.
Do work yourself over paying professionals
Some maintenance and renovation may need to be done by an expert such as anything structural to the building – but other things are cheaper if you can do them yourself, such as wiring, painting, plastering or basic plumbing. Learning these skills will also allow you to deal with repairs quickly when your tenants need it.
Get the right insurance
Landlord insurance will consist of a number of things including contents and building insurance, fire, floods and vandalism – but it can also cover you for a range of mishaps or unexpected circumstances. This can include any loss of rent due to having a tenant who cannot pay or if the property is unlivable and the tenants needs to be put up in other accommodation. Even if things are breaking in the home or there is mould or problems with appliances, you can be covered for any victim compensation from housing disrepair claims or other issues from your tenants.
Avoid void periods
Void periods are when there are no tenants currently occupying your property. During void periods, landlords continue to pay their mortgage but without rental income to offset it. Void periods can be avoided by screening people who are interested in your property and selecting those most likely to stay. This can include renting to families instead of young professionals, who might relocate soon.Renting an unfurnished property is another great way to avoid void periods, because this adds moving time.
Cut out the agent
Agents may charge prices up to 20% of the rental value, taking a huge slice of your profit. Landlords with time on their hands could save money by cutting out the agent. This will mean you would have to advertise, show, and vet the property yourself, as well as dealing with rent and repairs. This means that this option is not for everyone, but can be worth looking into for people with the time and expertise.
Use just one type of paint
Using a single colour and finish – in every room and even every property – can save you money. Since landlords are advised to paint their properties a standard magnolia anyway, this becomes easier.Sticking to the exact same paint means that you can buy in bulk, which ends up being cheaper. It also means that whenever it is needed, you are sure to have some extra paint lying around, saving the need to purchase small pots just for touch–ups.