Landlord’s New Year’s Resolutions
It has been well documented that the introduction of tighter rules on tax relief and borrowings will hinder some landlords’ ability to profit from buy to let in the future. However, while changes may have dampened the appetite to expand portfolios, those who already have successful buy-to-let businesses, be that one or ten properties, are looking at ways to make their investment work harder. Our top tips for 2018 are:-
- Have a good grasp on your existing financial affairs. Landlords with mortgages need to understand what impact changes to mortgage interest tax relief will have on their profits. Some landlords may consider realigning their portfolios, selling off properties which are perhaps in less attractive areas or in need significant updating, and replacing with more appealing investments which offer higher yields.
- Put a price on your time – If you are struggling to keep on top of changing legislation and your obligations as a landlord, seek professional help. The cost of having your asset taken care of will be far less than a fine for non-compliance.
- If you are going to be looking for new tenants and you have already considered a particular agent, it may be worth checking their first year rates because when the tenant admin fee ban comes in next year, they may have to increase their fees to landlords
- Keep stringent records of all costs associated with your portfolio. Following the introduction of stricter affordability tests imposed by lenders this year, landlords need to have this information readily available. Getting organised and forming a business plan is now essential in supporting a smooth mortgage application.
- Use any down time to carry out essential repairs and renovations to your properties so you can command the market rate for your property
- Avoid void periods – If you have had a void period on your property, now is the time to seek some advice on changes you can make to either your marketing strategy or your property itself. If your tenant turn-over is high, find out why. Are you managing the property efficiently? Happy tenants tend to stay put for longer so get some feedback and make some changes.
- If you are self-managing, make sure you are carrying out inspections. We recommend quarterly or 6 monthly. Quite often, repairs are needed, and tenants aren’t aware of their obligation to inform the landlord.
- Check with an accountant what landlord expenses are tax deductible – you may be surprised!