How to Protect Your Rental Income During the Cost of Living Crisis
Inflation rises in recent years has been making the cost of living for all of the UK more and more expensive. This increase is hitting both renters and landlords alike. So, in this ever increasingly costly time, how can landlords protect their rental income?
1. Energy efficient properties
In addition to the space, the decoration and the parking, tenants are now asking more and more about the energy rating on a property, and the energy suppliers that service the area. Major hikes in energy prices are a worry for everyone, including those looking to rent. Making sure your property is as energy efficient as possible, and keeping your EPC rating up to date, helps tenants keep their costs down.
2. Conduct affordability and credit checks
Checking a tenant’s affordability ahead of a new agreement is a vital step to ensure you don’t see any challenges for your tenant throughout their agreement. A general rule of thumb is that the cost of rent should be somewhere around 30% of a prospective tenants monthly income after tax. This allows the tenant to comfortably cover other living expenses such as rising electricity bills, council tax and water.
During the tenancy application process, Sperring Residential also undertakes a credit check on prospective tenants to ensure that the applicant has not got a history of being unable to pay their bills.
3. Maintain your property
It’s tempting to put off repairs or maintenance on rental properties, but our advice is to ensure your property is maintained to a good standard. Not only does this appeal more to prospective tenants, but it also ensures any existing tenants are likely to stay in the property for longer, reducing breaks in your rental income. It also helps reduce larger unexpected repair bills later down the track. As the old saying goes, it’s always better to repair the roof while it’s sunny, not while it’s raining.
4. Invest in landlord insurance
Protect your rental income in addition to your rental property. Just like a traditional home and contents insurance policy, landlord insurance covers any damage to your property and contents both caused by tenants, or environmental factors such as floors or fire. The difference, however, is that landlord insurance can provide financial protection for any lost rent or legal disputes with your tenants.
5. Get advice on tax
Property taxation is complex, so make sure you get expert advice to ensure you are getting this right. Tax advisers can help you reduce your tax liabilities and therefore your tax bill. Some ideas include claiming all your property expenses, such as the cost of safety certificates, void periods or the cost of replacement furniture and fixtures.
6. Review your mortgage options
If you have a mortgage on your rental property, make sure you regularly review your mortgage rates. There are many new products available all the time to account for fluctuations in the market. So, whilst you may have gotten a good deal when you first applied, there may be other options now, particularly if your fixed rate is coming to an end.
If you’re considering marketing your property for rent in Bedfordshire, our team at Sperring Residential is on hand to help you find suitable tenants and manage all aspects of your rental. Call us today on 01582 825548 or drop us an email to email@example.com to learn how we can help.