Six Ways for Landlords to Cut Costs to Increase Property Rental Profit
The days of 10% yields are now all but a distant memory for landlords.
Interest rates are still moving upwards and seem destined to hit 6% by the end of the year.
So what can landlords do to drive up margins & help cashflow. The answer is to cut costs and here are six ways for landlords to do this.
1. Buy cheap – landlords need to be tough negotiators
There is still money to be made in the property market whether landlords buy at auction or they find a residential investment property in the local estate agents or over the internet.
The secret for landlords is to always drive a hard bargain. Landlords should view 50 residential investment properties, put in 50 ‘ridiculous offers’; 49 will be rejected but the chances are one will succeed. Then a landlord will get a buy-to-let bargain. That way a landlords rent will reflect the value say of a £200,000 property but if a landlord has managed to secure a 15% discount their costs will only be that of a £170,000 residential investment property.
2. Landlords need to get the best finance deal
The biggest cost to any landlord is their mortgage. If a landlord can cut this by even a 0.5% that will work out as a cost saving of £62.50 per month on a £150,000 buy-to-let mortgage.
For a landlord to ensure their mortgage is competitive they need to keep checking their rate against the best BTL mortgage rates currently available.
Landlords should never, ever pay the mortgage company standard variable rate, the chances are you will be paying 1-2% above what you need to. Most landlords can save at least 0.5% on their interest rate if they shopped around.
3. Save on managing fees by DIY Landlording read more…
