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How to save money on property costs: A guide for UK landlords
Due to the cost of living crisis, many landlords are reevaluating their property holdings, with some deciding to sell. This has caused an increase in the number of properties available for rent, and with house prices falling, prospective landlords may be able to save a good deal.
To help landlords maximize their profits on their properties and save money, here's a list of ways to cut costs and avoid passing on price increases to their tenants.
Know your allowable expenses
One of the ways landlords can save money is by making all the claims they are entitled to.
As a landlord, you can deduct a variety of costs, such as insurance premiums, maintenance and repair costs, ground rent, fees for accountants, property managers, cleaners, and tradespeople.
However, you need to be aware of changes to claimable expenses for independent landlords that took place in April 2020 and check the government's advice on claimable expenses.
Know your insurance policy
It's essential for landlords to examine their insurance policy to ensure it meets their current needs and the risks they are likely to face in the near future. They should check whether their insurance policy's coverage, limits, and excesses are appropriate for the value of their property.
Consider the alternatives
Another option is to consider a portfolio mortgage or an interest-only repayment plan. A portfolio mortgage can consolidate all borrowing into one mortgage, making it easier to manage accounts and save money on remortgaging charges. Reducing buy-to-let mortgage repayments by moving to an interest-only repayment plan or lengthening the mortgage term is also an effective way of reducing landlord costs.
Asses your energy efficiency
Landlords should also assess the energy efficiency of their properties and find inexpensive, efficient solutions to make them more energy efficient. This can help preserve the building, lower maintenance expenses in the future, and appeal to both current and potential renters. If utility costs decrease, it may make it easier for them to accept any rental increases.
Know upcoming regulation changes in 2023
Despite the challenges facing landlords, being a landlord is still profitable in 2023, and property is typically a safe long-term investment because property prices generally rise over time.
However, landlords need to be aware of the changes that will take place in April 2023, such as the reduction of capital gains tax exemptions and the introduction of indefinite leases and ending "no fault" Section 21 evictions.
Before selling or raising rents, landlords should consider cost-saving measures such as checking their taxes, frequently examining their properties, and ensuring they aren't paying excessive rates on landlord insurance.