Renting out a property can be an unexpectedly costly occupation. Although expenses can be expected when owning a property, small repairs can add up quickly.
61% of landlords in 2021 had a gross rental income of under £20,000, according to Gov.uk. By reducing the unexpected costs that can come with the job, landlords can increase their net profits, as well as having more money to improve their tenants’ standard of living. This guide explains 5 ways landlords can cut costs without cutting corners.
Landlord association memberships
Membership to a landlord association can cost a subscription fee, but this fee is more than recuperated by the membership that it can provide you in the long run.
Members of landlord associations can receive discounts and perks. For example, in some areas you may be able to get a discount on the licence needed to rent your property. The savings you make on this can easily end up being higher annually than the cost of your membership fee.
With mortgage rates fluctuating, you could look at alternative mortgages or remortgages under better and more favourable terms.
You could speak to a broker and explain your situation, but if you are stuck on a standard variable rate, you could save hundreds or thousands per year under a new deal. You may consider speaking to banks, but also challenger banks and new competitors who may offer more manual processes and offer more personalised deals.
If you have cash available, you could look at making overpayments too in order to bring the overall mortgage total down – especially if you are facing higher rates.
Hiring skilled professionals often guarantees the best quality of work. Some tasks absolutely require an expert, and cannot be done by oneself.
However, small tasks such as painting and minor repairs can be learned very easily by using online resources. This will save you the cost of hiring a professional every time a small piece of work is done, which could end up saving you hundreds of pounds.
Void period avoidance
A void period refers to a period of time in which your rental property has no inhabitants. Void periods can be a nightmare for landlords, as there is no rent coming in, but they could still be stuck paying the mortgage, resulting in net losses.
Landlords can save a lot of money by doing their best to avoid void periods. For example, by making the choice to rent an unfurnished property, landlords attract tenants who will stay for a long time. It also means that tenants’ moving time will be higher, meaning you have more time to find a new tenant.
Agents provide a useful service to many landlords, but they also take a huge percentage of your profits – sometimes up to 20% of the rental value. While agents are crucial for busy landlords, if you have more time and energy on your hands, you could skip the agent.
By deciding not to use an agent, you would be taking on the burden of advertising, showing, and vetting your rental yourself. This is a big task, but if you have the time and expertise, you could save a huge amount of money by doing it yourself.