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Welcome
My name is Adarsh Shah, and I am the Director here at Parkside Estates. I’ve been working in the property industry for a number of years.
Welcome to our guide to helping landlords make the most of their property and portfolios in an efficient, economic and ethical way. Over the next few sections, we share several ideas and techniques that have helped many of our landlords run their rental investments professionally and achieve consistently good returns. We’ll also dispel some myths surrounding rental property rules, and highlight why a good letting agent can be a conscientious landlord’s best friend.
Rental profit, when made ethically and responsibly, isn’t something to be ashamed of. Quite the contrary – in our years of experience, we’ve learned that landlords who do the right thing are the most successful. We’re here to ensure your rental investments are as profitable as possible, keep you on the right side of the regulations, and help make your life easier.
If you have any questions about your responsibilities as a landlord, or anything rental property related, please don’t hesitate to contact me or a member of our team. Thanks for reading.
Adarsh Shah, Director, Parkside Estates
Five ways to earn more
Below are five ways landlords can increase their rental profits.
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Remember where the exit is
Even if you already have a rental property or a growing portfolio, it’s important to think about what you ultimately want from your investments. Is it to build a portfolio and sell it in the future? Or to hand it over to your loved ones? Whatever the reason, being clear about your end goal will help you structure the way your rental properties are handled – which often plays a part in making them more profitable in the mid to longer term.
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Buy at the best possible price
Yes, this sounds obvious, but many landlords investing in rental property either don’t have a budget for purchases or, more commonly, go over it. By knowing how much you have to spend, working with good local estate agents and being disciplined, you’ll give yourself the best chance of acquiring good-value buy-to-lets.
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Offer additional services
Many landlords miss a trick by not knowing what their tenants would pay more for. By offering additional services such as allocated parking, wi-fi, extra storage (such as nearby garage spaces) and even gardening services, you can earn additional income and provide extra value for your tenants. But remember, you can’t profit from utility bills.
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Consider setting up a limited company
A good accountant (see below) can give you advice on this. We’re seeing more landlords set up limited companies to make their portfolios more tax efficient.
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Open your mind
If you have a large property, have you considered turning it into an HMO (House in Multiple Occupation)? There is a lot of legislation around this, but a good letting agent can talk you through it. Or have you ever thought about short-term rentals? By keeping an open mind to opportunities, you improve your chances of maximising your returns.
Seven ways to save more
Below are seven ways landlords can save money without cutting corners.
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Treat good tenants well
When you have good tenants who treat your property (their home) respectfully and pay on time, every time, treat them well. A bad tenant can be a financial nightmare.
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Review your mortgage rates
It’s never been more important to regularly review any buy-to-let mortgages you have. Seek the advice of an independent mortgage adviser, and note when your deals are ending at least six months before they do.
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Have a maintenance plan and budget
Don’t leave the upkeep of your property to chance. By budgeting, planning and keeping on top of maintenance, you reduce the risk of small issues turning into big, costly problems.
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Be fully insured
Some landlords see insurance as a cost, while others view it as an investment in protecting their assets. You can get insurance to cover all manner of things, including buildings and contents, void periods, landlord liability and legal expenses.
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Get a good accountant
An accountant who knows their stuff when it comes to rental properties is a valuable person to have on your team.
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Be legally compliant
Knowing the myriad rules and regulations that affect landlords across the UK can save you thousands of pounds in penalties, and even more in stress and time.
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Work with an experienced letting agent
Yes, we would say that, wouldn’t we? But it’s true. We advise our landlords on all of the above points, can recommend solicitors, accountants and trusted tradespeople, and find good tenants who are fully referenced.
Five rental property money myths
There are many myths around how landlords can make the most of their rental investments. Here are five common ones we have had to bust over the years.
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Myth: buying buy-to-lets in a cheaper area is always a good idea
Fact: this isn’t always the case – remember, it’s cheap for a reason. It could be that the local rental market is saturated or, on the flip side, that not many people choose to live there. Consult an experienced letting agent for their opinion and advice.
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Myth: buying the cheapest possible property gives the best return on investment
Fact: again, that’s not correct. You need to know why the property is cheap. Is it a short lease? In bad condition? These kinds of issues can be expensive to resolve.
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Myth: always charge the highest monthly rent possible
Fact: while on the face of it this sounds sensible, we’ve learned over the years that getting the best tenants, who are willing to pay the going rate, is more financially beneficial to our landlords over the longer term.
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Myth: use every renewal to raise tenants’ rent
Fact: this is a recipe for losing good tenants. We understand you want to make the most of changes in the rental market, but a good tenant who pays on time, takes care of your property, and stays for the long term is a valuable person, and should be treated with respect and fairness.
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Myth: I’ll do everything myself and save loads of money
Fact: when you break down all the things a good letting agent does when managing a property, you’ll often see it makes more financial sense for them to take care of it. They’ll ensure the right tenants are in place, regular inspections are carried out and you stay legally compliant, and they’ll deal with any requests so you don’t have to.
How to change agents successfully
One of the easiest and most impactful ways landlords can make more of their rental investments is by working with a high-quality, experienced letting agent. If you are unhappy with your current letting agency, below are eight steps to help you switch agents smoothly.
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Check your current contract
Confirm how long the contract with your current letting agent is for. How much notice do you need to give them? Are there any early exit fees involved? (Remember, this contract is usually separate from any tenancy agreement signed between you and your tenant.)
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Give written notice
Once you’re happy with the leaving legalities, send written notice that you wish to terminate the contract. Recorded delivery is a good way to ensure receipt, and many agents will accept notice by email. Always ask for written confirmation that your notice has been received.
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Keep a paper trail
Create a paper trail or email thread of written communication between you and the letting agency. This will be invaluable if there are any misunderstandings or disputes.
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Gather the paperwork
Make sure you have copies of all the paperwork linked to the property. This includes gas safety certificates, warranties, tenancy agreements, tenant identification, EPCs, deposit details and several other items we can advise you on. Most good agents are happy to pass these straight over to the new agent, and we are always happy to contact the outgoing agent on behalf of our landlords to get any paperwork required.
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Tell your tenant
Let your tenant know you are switching agents. They needn’t know why, and the outgoing agent should also make them aware of your decision. The new agent will contact them to discuss rent payments, maintenance reporting and periodic inspections.
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Keep your new agent updated
Let your new agent know which stage of the switching process you are at. A good letting agent will help you throughout – this is something we do as standard.
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Collect keys and documents
Once the notice period is over, collect the property’s keys, the original tenancy agreement and any other documents, and reset any alarm codes if necessary. This is something we are happy to do on behalf of our landlords.
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Close things off in writing
Finally, get written confirmation from your outgoing agent that all fees are paid and that your working relationship has ended with no outstanding matters.
Your ten-point checklist
Here are ten steps to a more successful rental property investment.
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Do your research
Take time to research the areas you want to invest in. Questions to consider include: what will this area be like in five years’ time, and what is the current rental market like?
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Stick to a purchasing budget
When investing in rental property, you need to be disciplined about what you can spend.
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Remember, it’s an investment property
Some new landlords, in particular, buy property they really like rather than the types of home that are in demand with renters.
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Create a property profile
Work out the maximum amount you are willing to spend. Have a certain area in mind, and know what property type falls within your budget. A good letting agent can help you with this.
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Create an ideal tenant profile
If you are looking to invest in one- or two-bedroom apartments, young professional couples may be your ideal tenants. If it’s three-bedroom semis, you will most likely be renting to families.
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Have a repair and maintenance budget
Always have some money put aside for regular maintenance and unexpected repairs.
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Have an exit plan
Having an idea of what you ultimately want to do with your portfolio helps you structure things in the most profitable and efficient way.
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Regularly review mortgages
Know when your mortgage deals are ending, and begin researching options three to six months before the end date.
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Check your insurance
Don’t cut corners when it comes to insurance policies – they can be brilliant investments if the unexpected happens.
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Find a trusted letting agent
As the relationship between a landlord and letting agent is often an ongoing one, you need one who is experienced and trustworthy, and who you have a rapport with.
We hope you found this guide useful. We’re here to help with any rental property questions you have – call us on 020 8445 6737 to find out more.
General information, not legal, financial or tax advice — every situation is different, so speak to a solicitor or accountant about your own before you act on it.
