The cost of living crisis: how landlords can protect their rental income (6 tips)
Are your potential tenants able to afford their rent?
The UK is in a cost-of-living crisis, and it’s having a knock-on effect on landlords in London. More tenants are struggling to pay their rent, and landlords, therefore, are having to take action to protect their rental income during these difficult times.
At Lyss Homes, we are experts in the rental property sector, and we’re bringing your our six best tips to help you make sure your rental income is well-protected.
1. Always Carry Out Checks On Tenant Affordability
You should ensure that any prospective tenant is able to afford their rental payments. A lettings agent like Lyss Homes will be able to carry out these affordability checks on your behalf to ensure the applicant has sufficient income to cover the rent.
2. Keep The Rental Property In Good Condition
As times are tough, you’ll want to get as much rental income as you can for your property, and the best way of doing this is by ensuring the property remains in excellent condition so that it appeals to prospective tenants. Threadbare carpets, dated fittings and dirty paintwork are a turn-off for tenants. Remember, too, that the cost of repairs has increased in the current financial climate, so regularly keeping your property in a good state of repair will help you avoid any large repair bills in the long run.
3. Consider Offering “No Deposit” Contracts
Finding a large deposit can be difficult for prospective tenants, so you may want to consider offering an option for a “no deposit” contract which will give you access to a wider pool of possible tenants who may have sufficient income to cover their rent, but insufficient savings to cover an upfront deposit.
4. Carry Out Rent Reviews Regularly
You should review your rents regularly to make sure you’re maximising your investment while avoiding overstretching the affordability of your tenant. In many cases, landlords decide they won’t increase their existing tenants’ rent when they stay in the property for several years. You should weigh up whether you are happy to leave the rent as is in return for reliable tenants and on-time payments, or if you can maximise the yield further. Our experienced rental team can discuss your options with you if you are unsure on the best course of action.
5. Take Out Landlord Insurance
It’s possible to protect your rental income as well as your rental property itself should a problem arise in the future. Rental insurance is a cost-effective way to recoup your losses should the worst happen. Problems like fire, flood and theft as well as property damage caused by your tenants can all be covered by a landlord insurance policy, and you may even be able to get contingency cover that will protect you against tenants’ non-disclosure.
6. Take Some Tax Advice
You should always take the time to check that you’re paying the correct tax. Property taxation is a complex subject so seeking out expert advice regarding your tax liability as a landlord is essential if you’re keen to reduce your tax bill by as much as you can.
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