Top Tips for Reducing your Landlord Costs

The cost of living crisis has forced many landlords to reassess their property holdings, and some are even selling off. 

This has increased the number of properties available for rent, and with house prices falling prospective landlords may be able to get a good deal. 

Uswitch mortgages experts have provided a list of all the ways that landlords can cut costs and avoid passing on price increases to their tenants in order to help them maximise profit on their properties and save money. 

Make all the claims you are entitled to:

Costs that can be deducted from your income so that you only pay tax on the profits that remain are known as allowable expenses. Additionally, as a landlord, you may deduct a variety of costs, such as:

• Insurance premiums

• Maintenance and repair costs

• Ground rent

• Fees for accountants, property managers, cleaners, and tradespeople.

As a landlord, there were a range of changes to claimable expenses for independent landlords in April 2020, so be sure to check the government advice on claimable expenses but there are certainly still deductible expenses and cleaning costs. You could also look at the benefits of using a special-purpose vehicle (SPV). 

Examine your landlord's insurance policy:

It's never been more important than in today's unpredictable economy to make sure your landlord's insurance is current and meets your evolving needs. 

Examine whether your current insurance policy's coverage, limits, and excesses are appropriate for your current situation and the risks you are likely to face in the near future.

For instance, if the value of your property has decreased since you obtained insurance, your premiums may be excessively high. On the other hand, you can select limits that are insufficient and might force you to pay a claim out of pocket.

Consider a portfolio mortgage or an interest only repayment plan: 

You might benefit from a portfolio mortgage if you're juggling many accounts. It might not only make monitoring your accounts easier, but it can also save you money on future remortgaging charges by consolidating all of your borrowing into one mortgage.

If you’re not interested in a portfolio mortgage, one of the simplest ways to reduce your landlord costs is to reduce your buy-to-let mortgage repayments. If you aren't already on one, you could be able to move to an interest-only repayment plan or lengthen your mortgage term. 

Assess the energy efficiency of your properties: 

Finding inexpensive, efficient solutions to make your rental properties more energy efficient will help preserve the building and maybe lower maintenance expenses in the future. 

Also, it will appeal to both current and potential renters, and if their utility costs decrease, it might make it easier for them to accept any rental increases.

Kellie Steed, Uswitch mortgage expert, says: “The market is now difficult for landlords due to growing mortgage rates and the cost-of-living issue impacting rental returns. And landlords will suffer even more this year. Their capital gains tax exemptions will be reduced in April, and later in the year, the rental rules will change, introducing indefinite leases and ending "no fault" Section 21 evictions.

“There are, however, plenty of cost-saving measures that landlords should first consider before selling or raising rents. 

Landlords sometimes don't know how much they can write off on their taxes, or they may forget because of other obligations to frequently check their properties and landlord insurance to make sure they aren't paying excessive rates. Despite recent market volatility, being a landlord is still profitable in 2023, and property is typically a safe long-term investment because property prices generally rise over time."

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