Belvoir Lettings share their secrets on how clever landlords can save money on their property investments
Follow these simple tips to lower your costs and raise your property investment return – all are easy to implement and will encourage long-term positive cash-flow with little outlay…
1.) It’s all in the presentation
“Maximise presentation even if it means a small initial spend,” says Rick Flay, proprietor of Belvoir Sheffield. “The saving will come in the speed in which you rent out the property and will ensure fewer voids.”
Paul Cartwright, proprietor of Belvoir South Hants, agrees, “The property should be presented in the best possible condition. This will make it easier to let and thereby reduce the ‘void’ period between lets in which there is no rental income.”
2.) First impressions count
“Make the front photo used for marketing and the walk-up to the property attractive and inviting,” says proprietor of Belvoir Peterborough and Corby, Terry Lucking. “You only get ONE chance at the FIRST impression.”
3.) Think long-term
“I quite often use an old Scottish saying - ‘buy cheap, pay dear’ - when talking to new landlords,” says Mike Campbell, proprietor of Belvoir Falkirk. “This basically translates that if you put down cheap carpets you might think you are saving money but they won’t last as long so it’s a false economy. Equally this applies to furniture and fittings too.”
Keith Morrison, proprietor of Belvoir Aberdeen, agrees. “Don’t cut corners initially,” he says. “I’ve seen many landlords try to do jobs on the cheap or use cheap fixtures and fittings and it often doesn’t work out, sometimes even costing more in the long run.”
4.) Ensure you’re insured
“Invest in good Rent and Legal insurance,” advises Susie Geddes, office manager of Belvoir Corby. “Belvoir offer this at £99.75. The insurance will pay for all rent not paid in excess of one month for 12 months or up to £10,000, whichever is the lesser amount.
“Therefore it will pay for part payments as long as there is an excess of one month after the part payment has been paid. It also covers the cost of legal fees if you require to gain possession etc. It works out to be about £2 a week and could potentially save thousands.”
5.) Read the reports!
“Be certain that any maintenance reports are genuine,” says Terry Lucking of Belvoir Peterborough and Corby. “Ask your agent to give before and after photos and check the responsibility of the maintenance report – the damage may have been caused by the tenant (accidentally or negligently).
“Some agents don’t check the detail while others don’t understand legal responsibility - the result could be the landlord having to pay for something that should have been charged to the tenant.”
6.) Clever buying
Think carefully about the type of property you’re investing in and its location. “The worst property in the best area is always a better prospect than the best property in the worst area,”
says Mike Campbell, proprietor of Belvoir Falkirk.
7.) Picking your price
“If there are a number of similar properties on the market at a similar rent, consider
taking a reduced rent,” says Paul Cartwright of Belvoir South Hants. “While this may seem counter-intuitive, it will ensure that yours lets before the others and that you have the funds to pay the mortgage! This will certainly save money in the long term.”
Terry Lucking of Belvoir Peterborough and Corby agrees. “Always maximise annual rental income. Don’t leave a property empty for the sake of £50 difference in rent per calendar month if a potential tenant makes you an offer lower than what you were asking for – think about an annual profit instead.”
Remember, if a property is left empty, your return nothing for that month is nothing!
8.) Don’t delay – fix today
“Maintenance when required should be attended to as soon as possible,” says Paul Cartwright of Belvoir South Hants.
“This will impress the tenants and possibly extend their stay in the property. Also, if maintenance is left it will only become worse - and more expensive - to fix in the long run.”
9.) Speculate to accumulate
“Pay attention to the external environment and look out for risk factors that might put people off renting your property,” says Mike Campbell of Belvoir Falkirk. “Poor lighting and lack of defensible space can be off-putting for potential tenants. Re-visit at night, too, to make sure your property looks at its best at all times of day.
“None of these things will cost much but may have a good comeback, even avoiding the ‘void’ periods which can end up costing landlords in the long-run.”
10.) Good management matters
“Employ a good management agent, such as Belvoir, to manage the property for you,” advises proprietor of Belvoir Rochester, Karen Huane.
“A good letting agent will ensure that the landlord has professional working tenants and that their rent is paid on time and their property is looked after - this will save them a fortune long-term.”
11.) Brand power
Without clever marketing a property may be left empty. High visibility of its availability is a must. “Landlords should focus on agents who are highly visible on the web and various property portals,” says Terry Lucking of Belvoir Peterborough and Corby.
12.) Plan ahead for EPCs
“We are currently working with our Landlords to make them aware of Energy Performance Certificates,” says June Rakeshaw, proprietor of Belvoir Cheadle. “It will become a legal requirement to have an EPC in place from 1 October 2008 when the landlord is marketing the property. And, after the 1st October it is expected that there will be such a ‘rush’ for these that it could possibly increase the price.
“As the certificate is valid for 10 years we are suggesting to our landlords that they consider having the report carried out now to avoid the rush and possibly an increase in the cost later.”
13.) Seek advice before investing
“Always consult a letting agent prior to buying into an investment as they will know which areas to buy in and what to avoid,” says Wayne Mearns of Belvoir Southend-on-Sea. “We can also tell the investor what sort of property is in demand. Plus, I also inspect a property prior to my investors buying to spot anything that could be costly and to examine decorative needs.”
14.) Move with the times
“In this market, when there are a considerable number of similar properties being
offered for let, yours must stand out,” says Paul Cartwright of Belvoir South Hants. “If it is furnished ensure that it is furnished with modern furniture in good condition.
“If it is a student property consider providing ADSL and a wireless router as part of the let. This may cost more initially but will ensure the property is let with a minimum void and at a higher rent.”
15.) Grow your portfolio
“Draw down on equity to release cash for a deposit on another property,” suggests Terry Lucking of Belvoir Peterborough and Corby. “It’s a great time to buy on a flat market looking forward to future rises in capital values.”
A larger portfolio may also mean that you can negotiate discounts with builders, accountants and stockists of fixtures and fittings.
16.) Keep up inspections
“Regular inspections are a MUST,” warns Wayne Mearns, proprietor of Belvoir Southend-on-Sea. “This keeps the tenant aware of their obligations to look after the property and also gives the agent a chance to look for any maintenance issues that could be more costly later on down the line if not tackled early.”
17.) Rent appliances
Consider renting rather than buying expensive appliances, especially ‘white goods’. Craig Walker of Belvoir Camberley says, “Rather than buying washing machines that could potentially break down, you can rent them for about £10 per month. If, and when, they do break the rental company will do all the running around to fix or replace them, saving you the time and money.”
18.) Shop around for your mortgage
Don’t get tied in to a long-term mortgage rate. “Ask your letting agent for the details of a good independent mortgage advisor who will periodically review your mortgage for the best savings,” advises Wayne Mearns of Belvoir Southend-on-Sea.
19.) Get handy!
“Find yourself a good local handyman,” says Keith Morrison proprietor of Belvoir Aberdeen.
“He’ll be able to do all those simple jobs, such as tiling, painting, flooring, grouting and re-sealing baths etc, at the fraction of the price of a tradesman, such as a carpenter or joiner.”
He may even give you a discount if you use him exclusively, especially if you have more than one property.
20.) Estate agent versus lettings specialist
“While estate agents once dealt only with the buying and selling of properties, many have now diversified - including doing lettings as a sideline,” says Rick Flay, proprietor of Belvoir Sheffield.
“On paper what they offer is fairly similar to a lettings specialist. A tenant find service and full management can be all part of the service. But! The killer is in the detail… and potentially the quality of delivery.
“Before deciding whether to use an estate agent or lettings specialist to take on their property I would suggest that the landlord decides what they want from the relationship.
“If they want a quick turnaround on finding tenants for empty properties, legal protection, quality leases to protect their assets, and someone to talk to who has been trained and can actually add value, then surely it’s a no brainer.”
To find your nearest Belvoir office, visit their website at www.belvoirlettings.com
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