There are plenty of changes that you could make to ensure 2018 is more profitable, with Simple Landlords Insurance advising buy-to-let landlords to focus on the basics this year to pave the path to profit.
The experts at Simple Landlords Insurance have compiled the followed 10 tips:
1. Revamp your relationships - Happy tenants are less risky, and more profitable over the longer term. Take steps to ensure that you deal with queries and concerns as quickly as possible, and proactively check in with your tenants on a regular basis.
“Keeping your tenant happy is paramount to the success of your property business,” says Carl Agar, founder and managing director of letting agency Big Red House. “A quick phone call every three months gives you the opportunity to ensure they are.”
2. Connect with your contract - Understanding the exact nature of your relationship with tenants is also crucial. Familiarise yourself with the details of your contract, especially if it’s been created ‘off the shelf’, and make amends to suit your property, tenants and circumstances. This will minimise the scope and time it takes to deal with any disputes.
3. Inspect and maintain – Research from Simple last year showed that less than one in four landlords inspect their properties at least once a year. If you want to avoid nasty surprises, go on the front foot and undertake regular visits to check everything is in order.
Similarly, promise to carry out any required maintenance within a specific time period to guarantee your existing tenants will be satisfied, and avoid the potential costs of finding new tenants.
4. Create the perfect space – That means for both you and your tenants, especially if you one of the 23% of landlords who have experienced periods of unoccupancy of at least 2 months. Creating a home where your ‘ideal’ tenant feels immediately comfortable – or letting your tenant put their own stamp on it - could make all the difference, says Bindar Dosanjh, property mentor, and founder of the Female Property Alliance and Smart Core Wealth.
“That may mean clearing your entrance way. It may mean moving the furniture around. It may mean a splash of colour, a mirror or clearing the clutter. The benefits of a property with ‘move right in’ appeal are clear. Picture yourself in the property and identify what will appeal to potential tenants.”
5. Grow your knowledge – With over 100 pieces of legislation in force, the buy-to-let market is complex, and shows no signs of simplifying in 2018. As a result it’s essential to read up on any changes, both existing and new. Also take advantage of other resources available, including joining a Landlord Association and attending events. Check your local authority or Landlord Association website for upcoming events in your area.
“Going out and socialising may be the last thing you feel like doing at the end of a long day, but meeting other landlords, agents and entrepreneurs really can reap dividends in terms of finding out what’s happening property-wise in your locale,” Agar says.
“You may even find a partner for a great property deal, or get help with a property-related issue that had been bothering you a while. Also, the more that landlords can be represented by such groups, the more successful the sector can be at fending off unwanted legislation.”
6. Review your lending – Whether it’s testing the market for a better deal, revaluing your property to check your LTV, or reviewing your existing arrangements to understand the implications of revised lending requirements, now is the time to check you’re paying not a penny more than you have to in order to service your debt.
7. Start a ‘Rainy Day’ fund – In these uncertain times, it is prudent to allocate funds to cover any unforeseen expenses. This may entail setting up a separate, ring-fenced account exclusively for your rental properties. Keep it clear, keep it clean, and you’ll feel more confident you can weather any storm.
8. Check your insurance – Our figures show that only 41% of landlords have a dedicated landlord insurance policy which means a large number are either out of pocket or dangerously underinsured. Don’t take any chances, especially if your circumstances have changed but your insurance hasn’t. Check your policy, check your rebuild value (building sum insured), and don’t be afraid to pick up the phone to your insurer before there’s a claim to be made.
9. Stay ahead of the curve – If you have additional funds at your disposal, find the best property hotspot for any new investment. Key considerations include improved transport infrastructure, regeneration or redevelopment plans and ‘retail result’ – take advantage of market research that prime retailers have conducted before opening a new store, and consider following their lead.
10. Embrace technology – Take full advantage of the information age. There’s software out there that can help you systemise and manage your properties, and Community Landlord groups are a great way to gain and share advice. Technology can also help you promote your properties and test your property against the market. The world is now at your fingertips…. so feel free to explore it from your smartphone.