Every landlord is looking for ways to maximise the revenue and profitability of their property. Here are a few tips to help that happen.
Get the rent right
The rent is your only source of income. You need to get it right. But setting the rent is one of the toughest decisions any landlord faces. Pitch it too high and you risk scaring tenants away. Too low and you'll be heading for financial problems. Before deciding on the rent do your homework. Check out what other landlords are charging. But do remember to compare like for like. Make sure your rent is competitive with other comparable properties in the area.
But it shouldn't just be the local market which dictates the rent you charge. You need to do your sums. Whatever figure you come up with it needs to cover your mortgage payment and annual expenses. And that's before you take the need to make a profit into account.
Setting the rent can be difficult. But getting it right makes a huge difference to your bottom line.
Keep void periods to a minimum
The best way to get the most out of your buy to let property is keeping it occupied. An empty property doesn’t generate any income. Unsurprisingly then keeping void periods to a minimum is essential. Of course, there will be occasions when the property is empty. When you're renovating or between tenancies.
But having a new tenant lined up as the current tenancy draws to a close is one way of ensuring the flow of rent money continues. Needless to say, you mustn't wait until the current tenant moves out before looking for their replacement.
Start marketing as soon as possible and use a reliable online letting agent who will advertise your rental on the big platforms like Rightmove. This makes it easier and quicker to attract new tenants. On average it takes only 12 days to let a property listed with MakeUrMove.
Convert to an HMO
If you own a larger home within your property portfolio consider converting it into an HMO. There are some obvious advantages to this type of property:
• Multiple tenants mean multiple rent payments every month.
• Less chance of void periods.
• Potential for high profits.
However, there are costs to consider before going down the HMO route. The biggest expense will be the conversion work itself. But you must also factor in the rent you’ll lose during the work. Managing HMOs can involve a lot of admin. And there are risks. Especially with student HMOs. But it may well be an option you consider to increase your revenue.
Reduce your costs
Sometimes it isn't possible to increase the revenue your property generates. But you can still boost its profitability by reducing your costs. There are a few key areas in which you can look to save. The first thing to look at is your buy to let mortgage. Is it possible to switch products or lenders to find a better deal? Reducing your monthly mortgage payments will bring big savings over the course of a year.
But also look at other areas of your business. Can you find contractors or a handyman who can do your maintenance and repair work to a high standard but at a lower cost? What about your landlord insurance? When it's time to renew look around for a better deal.
Look at the professional fees you're paying. Can you find an accountant who charges less? Is your letting agent justifying the fees you pay them or can you find a similar but better value property management service elsewhere?
Go through your accounts with a fine-tooth comb and you're sure to find areas in which you can save money.
Find the best tenant and encourage them to stay
And by the best, we mean one who will pay the rent in full and on time. Make sure you reference your tenants and don't let to anyone you feel may cause issues. Sometimes the gut feeling is more reliable than references.
Once you have a good tenant in your property do your best to encourage them to stay. A reliable long-term tenant is worth their weight in gold. You receive your rent and don't have to worry about void periods. Which is great news for your cash flow and profits?
Private landlords can find tenants fast by listing their property with MakeUrMove the online letting platform bringing landlords and tenants together.