It’s been a difficult few years for landlords. First there was the credit crisis which resulted in escalating tenant arrears, a dramatic fall in the number of mortgages to choose from and severely tightened borrowing criteria. Then there was the change in the tax relief given for mortgage interest, which is much less beneficial to landlord’s than it used to be. There was a freeze on evictions during the pandemic and more tenants struggled to pay their rent due to job losses. Owning a rental property can still be a sound investment move though, but it’s important to take steps to protect your property.
- Make sure you have buildings (and contents) insurance so in the event of a fire or a flood or similar, your property can be fully restored. Landlord insurance such as Rental Void Cover and Rental Guarantee Insurance can protect you from the financial disaster wrought by properties lying empty and tenants absconding. And the cost of your premiums is tax-deductible. As always it’s worth shopping around for a good deal. You can compare landlord insurance online to make sure you have the right policy for you at a good price.
- Use a mortgage broker to get the best deal on your buy-to-let mortgage. Consider locking into a competitively-priced fixed rate, which could help optimise your portfolio budgeting. It will give you peace of mind and protect against future interest rate rises (rates are at very low levels currently, so it’s more likely they will move up than down). If you were happy with the broker who arranged your existing finance, it is worth consulting them on a regular basis to see what else is out there and what they recommend you do with your mortgage(s). They can offer invaluable advice based on their industry experience; they have access to all of the deals currently on the market; and do a lot of the paperwork for you. A broker can also help you restructure your financial arrangements, reducing your costs or releasing funds to expand your property portfolio.
- Improving your property can help you avoid having your rental property empty without a rent-paying tenant for long. You don’t necessarily have to go to a lot of expense, but investing a bit of cash in repainting the house, replacing worn carpets and at least making it look as cosmetically attractive as possible can really pay off. Even making sure that your rental is sparkling clean before viewings can make a difference, although that can be difficult if the current tenant is still occupying the property.
- Be an approachable landlord. It makes sense to do everything in your power to keep your tenant happy. The longer each tenant is in a property paying the rent on time, and the lower your costs. Think of your tenants as your customers. Give them as much notice as possible about inspections; make sure any repairs are carried out promptly; and keep them informed. Hopefully, in return they will keep you advised of any changes to their plans or their circumstances.