Being a residential landlord comes with risks and responsibilities; it is important to ensure you are maximising your profits in order to ensure a stable profitable rental income.
We understand the worries you may have as a residential landlord and we’re here to help you to understand the market to make the most out of renting your property.
At Romain Coleman our specialist landlord solicitors exclusively represent landlords. Our Property+Plus service is there to give you support as and when you need it. Having a property to let may increase your income, but only if you remain vigilant to the changes in the market and implement ways to ensure you consistently have tenants.
Here are 5 top tips to help you increase your rental profits:
According to the House of Commons Library, the short-term letting market is becoming ever more popular in the UK, bolstered by websites such as Airbnb that make it far more accessible than before. It has the potential to be extremely lucrative, considering that in some cases letting prices can be significantly more than standard long-term lets. With short-term letting, landlords can make money daily rather than monthly. However, while this means a higher rental yield, it also requires more work and comes with risks. This is explained further in, “Should you consider letting out your property short term”.
Property maintenance, even wear and tear for instance, means you’ll have to spend more frequently to prepare your property for the next tenancy. If you can find new tenants quickly enough however, and keep the turnaround time as short as possible, the benefits can outweigh the risks. Here are five quick tips to finding tenants fast.
The basics are important. Keeping on top of any damages to your property can help you to reduce overall costs. You should conduct regular checks, maintenance, and thorough cleaning between tenancies – you could hire a carpet cleaner or conduct simple cosmetic fixes. Even during a tenancy, make sure to regularly inspect your property; this will help you spot any damages early and allow you to fix them before they become a serious and more expensive issue. Remember, legally, you cannot enter your property during the tenancy without the permission of the tenant.
By fixing problems early on, you can save yourself money in the long run and avoid the difficulties of a property disrepair claim. If you’re letting short-term, a solid reputation will help to bring in tenants fast: reviews of poor-quality properties will scare away any potential new tenants before they even walk through the door.
In summary, the interior of your property is important, as tenants are very likely to pay more for a property that looks and feels high quality.
Deciding on how much rent to charge for your property is a balancing act: overcharging will make your property too expensive for potential tenants and cause it to be empty for long periods of time, whereas undercharging can cause you to miss out on an ideal rental income.
For short-term lets, it’s important to look at your competition: your price must be competitive within the area, and it may be necessary to adjust it for it to remain an attractive option to potential tenants.
For long-term lets, reviewing the rent once a year can help your income to be in line with inflation. In order for you to do this though, it’s important that you stipulate a rent review clause in the rental agreement.
Managing your day-to-day expenses and taxes is a key part of being a successful landlord. Keep your paperwork in order and save all your receipts and renters bills. Don’t forget, as a landlord you can claim the costs you pay as an expense to reduce the amount of tax you pay on rental income. The most common types of expenses you can deduct include council tax, gas and electricity as well as the costs of services such as the salary of cleaners.
Our experienced residential property landlord solicitors at Romain Coleman can advise you on the tax relief services that are available to you.
Being aware of any changes to property laws can help you to stay ahead of the game. By being up to date with any legal responsibilities, you can ensure that you’re renting out your property legally while also remaining protected. Often rule changes such as the cuts to mortgage interest tax relief that will be phased in until April 2020 are very important to know. Changes may require an updated or different license to avoid receiving a fine that would eat into any profit you make. Signing up to our Property+Plus service can help you to be aware of any changes that occur to property laws.
With these tips in mind, you can go about making the necessary changes to increase your rental profits. Romain Coleman has years of experience in supporting landlords.
Our residential property landlord solicitors can provide you with specialist landlord legal advice and support, to ensure you are making the most out of renting out your property.
This article was first written in 2018 and was updated on 25/09/2019.
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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.