Renting out your property – or investing in a buy-to-rent one – is often a great way to generate additional income.
The entire process of acquiring a property, possibly renovating it and renting it to tenants, is associated with considerable costs in several phases.
Here are four tips to help you cut those costs and get the most profit from renting out your property.
Invest in decent quality materials to maintain rental value
First, only spend money on items that will increase or maintain the rental value over the long term.
In practice, this means choosing hard-wearing and easy-care materials. Opt for tiled bathrooms, quality furniture and appliances and materials like hardwood and laminate floors.
While this strategy increases your initial investment costs, experts believe it will pay off in the long run.
For example, Just Landlords, a rental company insurance company, notes that its customers break even relatively quickly: “As tempting as it is to save money by buying cheap furniture, it is easy to spend more to Items to repair or replace interruption. “
If something breaks, fix it immediately and perform regular maintenance checks. Leaving things behind can quickly lead to expensive consequential damage or even liability claims.
Do it yourself – if you can
Another great way to cut costs – at least on your first rental home – is to use your own skills and those of your friends and family to do some DIY.
Thoroughly clean the room, paint the walls, replace carpets, install appliances – these are all jobs that you can do yourself with a minimum of skill. And paying contractors for this type of work will add to your bills quickly.
However, stick to what you do confidently. Otherwise, you’ll end up paying more to fix bugs than to have contractors get it right the first time.
Also: gas and power lines, the installation of boilers and other plumbing or anything else that requires special permission should be left to experts.
It’s basic advice when it comes to saving money, but it applies just as much to first-time renters as it does to anyone buying groceries: shop around.
Whether landlord insurance packages, brokers, tenant information or security certificates – there are countless offers. It may take some time and research to find the provider that best suits your needs, but it can save you thousands.
As a rule of thumb, compare at least three offers for larger expenses. Local suppliers may be the best choice for specialized work, but online vendors can often negotiate the best prices with service companies due to their higher customer base.
Use consumption deductions
Finally, consider the tax deductible costs. There is a lot that you can deduct from the tax you pay on your rental income – so keep receipts and file your taxes accordingly.
Maintenance and repair costs, replacement of furnishings and building insurance are tax deductible. By making these expenses deductible, you could save thousands of pounds annually and possibly even move you into a lower tax bracket.