If you’re a private landlord, you’re probably feeling the squeeze from the new tax rules that are coming into effect. In buy-to-let land, we’re used to adapting to new regulations but now more than ever, it’s important to be keeping a close eye on your business.
Being a professional or part-time landlord isn’t the same as a regular day-job. That’s why most of us chose to do it. As a landlord, you can earn an income whilst being more flexible with your time to fulfil other commitments of work, family or education. But this definitely doesn’t mean it’s not hard or stressful at times. We’re not hanging around in fancy offices behind polished walnut desks watching the cash roll in; this isn’t Hollywood.
Although it’s kind of grubby at times (student property changeovers, anyone?) and definitely involves diligence and hard work, being a landlord also comes with serious responsibilities. You’ve probably made a significant investment and are taking a financial risk so it’s a big commitment. There’s nothing wrong with wanting to see a healthy profit. No one wants to or should work for free, so why should you?
In this article, we’re going to share some tips on how you could increase profits by saving yourself money, time and hassle. Helping you keep your tenants happy, your property in good condition, your profitability high and (importantly) your stress levels low!
Saving money isn’t about cutting back on your property or your tenants, it’s about being savvy. Not wheeler-dealer savvy, just business savvy.
Everything you put into your property, you should be getting back out. From the decor to writing up a detailed inventory. There’s no reason you shouldn’t be achieving the top possible rental price if your property is in great condition and you’re providing a great service for tenants.
Savings will come from keeping a close eye on financial diligence. Something that, compounded by confusing tax rules and regulations, can be pretty darn difficult.
For example, if I asked you what your estimated maintenance costs were on your properties year by year. Would you know? If the answer is no, then you’re in the same boat as the majority of part-time landlords. But there are easier ways to keep on top of your buy to let finances.
Track Expenses Accurately
Not many landlords meticulously track every single expense from maintenance to advertising fees. Individual payments made throughout the year can easily get overlooked or lost, it happens to us all!
But as you claim expenses against tax, all of these missed payments can add up. You could be losing hundreds of pounds a year or more if you have multiple properties.
Luckily, you don’t need to spend hours tracking everything manually anymore. Thanks to Open Banking, platforms like Hammock can help by tracking your expenses automatically and even categorising them for you. Not only that, you can even upload and save all your receipts in one place. Better than saving them crumpled up in a box (erm… I mean, who would do that? Cough…).
This really helps at the end of the year when you’re filling in your tax return! Which brings us to:
Make Tax Returns Easy
Filling out your tax return, especially when you have more than one job or property can be a blooming nightmare. Trust us, we’ve been there and done it! Adding up and categorising expenses, rent payments (and missed payments), mortgage payments, bills and more makes it a pretty complicated and lengthy process.
Our platform not only tracks and categorises your expenses, but it also provides you with real-time figures of how much you’ve spent and how much you’re earning. All the figures you need for your tax return are available on your secure personal dashboard, and you can even download them.
Use One Bank Account
If you’re not already, try using just one bank account for your rental properties. Using multiple accounts and cards is the plainest recipe for confusion.
Hammock will soon be launching a bank account for landlords, making it even easier for you to track your finances, watch this space!
Keeping on Top of Maintenance
As a landlord, you’re responsible for most of the maintenance of the property. This includes:
- Electrical wiring
- Gas pipes and boilers
- Heating and hot water
- Chimneys and ventilation
- Plumbing inc: sinks, baths, toilets, pipes and drains
- Common areas including entrance halls and stairways
- The structure and exterior of the building, including walls, stairs and banisters, roof, external doors and windows
- Fire alarms, smoke detectors and carbon monoxide alarms should be regularly checked.
- Ensuring your property matches up with the latest fire safety guidelines.
You’re also responsible for any redecoration that’s needed after repairs are completed.
It’s important that you keep your property inventory up to date. If you get a thorough inventory, as long as there aren’t any big changes to your property, you should just be able to update it yourself to reflect the property. This can save you money, as long as you ensure you make sure your tenants are happy with it, sign it, and are given a copy at the start of their tenancy.
Keeping on top of maintenance with regular checks can save you money. Sometimes it’s far cheaper and easier to maintain a property than to fix it after something goes wrong. If there’s a leaky tap, for example, get it fixed immediately. Things that can seem small, like a leaking tap, can soon turn into a flood. All it takes is someone leaving the plug in.
With Hammock, we help you keep up to date effortlessly. Simply upload any of your documents for your property, like your gas safety certificate for example, to Hammock. If you pop in the expiry dates, we’ll send you a reminder to get it renewed. This way, you don’t need to worry about missing anything and can keep effortlessly up to date.
Keeping your property maintained throughout the year will mean a shorter turnover time between tenants. If houses are well-kept, you can avoid more serious maintenance issues down the line.
A well looked after property will also ensure you’re in demand with potential tenants. I mean, why would anyone want to move into the shabby house down the road with the grey net curtains when they could take up residence in the palace you’ve created?
Stay on top of incoming payments
Remembering to check on your bank statement and having to browse through multiple transactions to locate rent payments are big headaches. With Hammock, you’ll get instant notifications when rent is paid into your account, so you can easily keep track. You’ll also get recap emails with the summary of all payments received, grouped by property. And the same goes for missing transactions: if any rent payments are overdue, you’ll get notified with all the details you need.
As well as help with rent collection, you’ll also be able to view all your properties finances on your own private dashboard. This way, you’ll know exactly what’s coming in and out, as well as any payments due in the future.
More Money-Saving Tips
- Take time to find the best tenants and start looking early on. If you end up with an excess of applicants, ask if they’d like to leave you with their email so you can let them know if the property becomes available in the future.
- Don’t feel awkward about asking for bank statements a letter or email from your tenant’s employer to confirm their employment.
- Reply to your tenants quickly, give them plenty of notice and be proactive about looking after the property. You’ll be more likely to keep your tenants if they like having you as a landlord, decreasing turnover. Meeting tenants in person can also really help establish a rapport that can make communication easier throughout the tenancy.
- Consider missed rent insurance in a recession, or if you rent to higher risk tenants or have student lets. This will cost you more monthly, but save you a lot if you ever need to use it.
- Use a comparison service to check the best deals for any insurance you take out.
- Check out the best rental properties near you. What do they charge? If they charge more, do they have anything you don’t have? Ensure you’re asking for a fair rent, but make sure you’re not undercharging.
Let Us Help You
Helping take the stress and strain away from being a landlord is what we do at Hammock. We can give you back time and save you money by automating the admin and making sure you’re up to date on everything from your rental income to your gas safety certificate. Say goodbye to time-consuming tax returns! We can give you a clear overview of your income to make deciphering your finances a cinch, helping you make better decisions, faster.
If you’ve got any questions about anything discussed in this article, we’d be happy to help. Please feel free to email us at firstname.lastname@example.org.