Ten tips to save the Do It Yourself landlord time and money

Introduction

 No matter what the size of your portfolio or the number of years you have spent in the lettings industry there are always 2 challenges:  doing things more efficiently and cheaply.  This short article is designed to help you save money and time - often this takes the form of IT solutions but not always!  This article outlines ten tips to save the Do It Yourself (DIY) landlord time and money.

 

 

PROPERTY HAWK

Do you have trouble maintaining all of the paperwork that comes with letting a property?  Property Hawk provides free online software to quickly manage your lets.  It allows you to create a Tenancy agreement and rent payment schedule in seconds.  It also has a range of information that is of general interest to the landlord.

Landlordzone

An online resource for a huge range of information associated with letting, ranging from sample forms to a forum where you can learn from others' experiences, and most importantly it is free!  A highly recommended resource.

The gumtree

The gumtree is an online resource that allows you to advertise your property to let, for free.  It also allows you to test any potential purchase to determine the likely rental value that can be achieved for a property in a particular area. 

Join a landlords association

There a number of different organisations that offer you a wide range of services ranging from legal advice to discounts on insurance.  Although this typically costs you £80 to £100 to join, you often recoup part or all of this cost through discounted products such as insurance.  The information, training and knowledge provided by such associations ensure you are up-to-date with the latest legislation ensuring costly law suits are avoided.  Landlord associations include the Residential Landlords Association and the National Landlords Association.  It is often best to investigate the benefits of each and choose one that suits your needs.

Thoroughly check your tenants

This sounds obvious but, do it in a consistent manner and never be rushed by someone eager to move in and it will save you money in the long term!  Always do a credit check to highlight any problems with the tenants' credit worthiness.  Always check a tenants references, ask for proof of identity (passport, driving licence) and ask to see at least 3 months bank statements to check their income.  These simple steps will minimise the amount of time spent managing your property and maximise your income.

Gas Checks

As a landlord, you must by law, ensure your gas appliances pass the Landlord Safety check.  This means that they are functioning properly and do not have defects which may result in your tenants death!  However, many people do not know that they are also have a duty of care to their tenants which means that they should get their gas appliance serviced every 2 to 3 years to ensure that they are functioning properly.  This also makes sense as preventative maintenance which can save you money in the long term by extending the life of your gas appliances. Always ensure that the person issuing the Landlord Safety check and undertaking maintenance on gas appliances is Gas Safe (formerly Corgi) registered.

Liability insurance

This could save you an absolute fortune if one of your tenants or a trades person is injured whilst on your property.  Without this you leave yourself open to claims that can reach millions of pounds, claims which may result in you losing not just your property portfolio but also your home!

Before taking out any insurance always check that it provides adequate insurance and never underinsure!  If you are a member of a landlord association, you often receive discounts on the cost of liability insurance; helping you to recoup some of the joining fee.

Hire a tax professional

Many landlords perform their own accounts to save an extra few pounds a year.  However, by employing an accountant or tax expert they can save you hundreds of pounds a year by informing you of the best time to modernise your  property, how to deal with expenses and the types of expenses that you can legitimately offset or minimise.  These tax savings often amount to more than the fee you pay the accountant.   K&G Lettings Limited recommend KM Business Services for such services.

Claim your mileage

The government allows you to claim you mileage when you use your private car/van to visit your property or when you collect supplies in order to maintain your property.  Remember to make a note of the date, miles travelled and purpose of your trip and then offset them as a legitimate expense against your profits.  In 2008, the government allows you to claim 40p per mile for the 1st 10,000 miles travelled and 25p for any subsequent mileage in a car or van.  There are different rates for travel by motorcycle and bicycle.  These allowances are subject to change in April each year so, remember to check the mileage rates at the HM Revenue & Customs website or ask your accountant or tax adviser.

Interest only mortgage

This is a risky strategy but can often help to maximise the returns on your rental property.  This involves using the tax break that is given to buy to let properties which involves offsetting your mortgage interest against your profits.  This can only be the interest portion of the payment, you can not claim any capital you repay as an expense.

The advantage of this strategy is that you make more profit by repaying only the interest each month.  This has the disadvantage that you will not repay the mortgage on the property.  This is a risky strategy and must fit your overall investment aims.  Always consider the risk that you can afford to take with your investments and seek professional advise before making a decision.

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© K&G Lettings Limited 2006-2013. All rights reserved. Never rely exclusively on our standard answers and general content. Always do your own specific research and seek professional advice. Always have the entire facts and all documents to hand before making any decision.

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