Money-Saving Tips for New Property Investors

Getting into the property market as an investor is a challenging but incredibly lucrative endeavour, if you know how to make the right types of investments. If you know how to make the right decisions, property investments can set you up financially for the foreseeable future. Here are a few ways you can save money while you’re making money.

Know where to invest

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

Understanding property market trends will help enormously in helping you decide where to invest in property. There are growth areas around the country where rental yields are higher, and these change continually, so it’s important to do your research so you can take advantage of capital gains. Cities such as Birmingham, Manchester, Newcastle and Edinburgh are all popular destinations for investors, with plenty of potential tenants and higher rates owing to the central locations.

Pay attention to average rental rates which will help you determine if an area will pay off your investment costs sooner and whether a property in that area is worthwhile. Vacancy rates will also help you identify areas that are in demand, so you can be sure you’ll always be able to find tenants. This can be an ongoing challenge for landlords, so having peace of mind that an area is consistently in demand will minimise the risk of an empty property.

Get professional advice

While it may seem counterproductive to spend money on professional services, specialists will be able to identify areas where you can make savings, whether that’s finding you the best mortgage deal or reducing taxes. Firstly, you should hire an accountant who can guide you through the process of purchasing the property and help advise you on setting up your investment portfolio. Depending on how many properties you’re managing, you could be dealing with large sums of money each month, so it can be an advantage to have an experienced accountant handle your finances for you.

An experienced mortgage broker will also help you get the best mortgage deal for your buy to let property. As mortgage specialists, Town & Country Mortgage Services explain: “there are now plenty of competitive buy to let mortgage deals around that are specifically aimed at the buy-to-let market, ranging from special offer buy to let mortgage deals to fixed and variable rate options”. In order to ensure you’re getting the best deal, you need to work with someone who understands the nuances between these options.

Shop around for insurance

Insurance is essential for landlords, protecting their property and the returns on their portfolio. However, many people wind up overpaying for their cover, so it pays to shop around. Insurance policy rates vary depending on whether the property is secured via window locks and alarms, the age and profession of the tenants, and what type of property you’re insuring. You can cut costs by checking what the policy you’ve chosen covers, so it’s not more or less than you need, and increasing your excess to reduce monthly premiums.

Determine maintenance costs

The age and condition of the property will affect how much you can expect to pay in maintenance costs, which will impact how good of an investment a property is. If you need to pay out thousands in repairs and renovations, is the property really worth the price you’re paying for it?

Compare the costs of an old property versus a new property – the former will be cheaper to buy, but may need more work, while a newer property will require less maintenance but will cost more to purchase. Extra features like a garden or a swimming pool may also seem like an appealing option, but these will cost money to maintain which will cut into your profits.

Final thoughts

Investing in property requires plenty of research and planning, but when you choose the right property, it can provide great returns. Whether you’re just starting your property portfolio or you’re adding to existing properties, there are always opportunities to save money and boost your profits.

From choosing the location carefully to making sure you balance upfront costs with ongoing maintenance fees, and making sure you work with professionals, there are cost-saving measures that property investors should be aware of.

How to Create a Low Maintenance Rental Property

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

For most landlords, the goal of a rental property is to make money. But maintaining a property can be expensive, especially when tenants are moving in and out. One way to ease the financial burden of this process is to create a durable, low maintenance property that will stand up to wear and tear more effectively.

Here are a few ways you can save money as a landlord while also providing a comfortable and attractive property for your tenants.

Avoid matte white paint

There’s a temptation to paint the entire property white to give the illusion of freshness and space. But white shows up marks and stains far more than a darker shade, meaning that it requires repainting more often. Instead, you can choose a neutral colour such as a light grey or beige which still opens up each room but masks wear and tear more efficiently.

You should also choose a paint that is hard-wearing and will stand the test of time for longer. This is particularly key in areas where spillages are likely, such as the kitchen.

Keep the colour palette consistent

Painting each room a different colour creates a lot of visual interest in your property, but it’s more costly and more difficult to maintain. It can also be off-putting for some tenants, as you might choose colours that aren’t to everyone’s taste.

It’s a good idea to keep the colour of the walls and trims simple and neutral to appeal to a broader audience and to use the same colour throughout all of your investment properties. This will keep upkeep costs down and will also make it easier to touch up chips or marks quickly if you need to get a property ready for new tenants.

Stick with laminate worktops

The kitchen is an area of the home that’s subjected to a lot of wear and tear, and if you’re not careful with the materials you choose, you could find yourself replacing fixtures regularly as a result. Wooden worktops might look great, but they’re not a great investment in a rental property, especially around sinks as tenants might not be vigilant about keeping them dry and well-cared for.

Plastic laminates are easier to maintain and are an affordable solution for rental properties. “Laminate worktops work best for busy and messy households since they require less maintenance” explain worktop retailers House of Worktops, “they’re easy to clean and don’t need additional treatments”.

Choose large tiles

Dainty details like mosaic tiles might look aesthetically pleasing in a kitchen or bathroom, but they can be a burden to repair or replace if they become damaged. Larger tiles minimise the amount of grouting required, which can become mouldy if it’s not maintained properly, plus they’re neutral so they’ll withstand passing trends without looking dated.

If possible, choose a darker grout that will stay looking cleaner for longer, unlike white grout which can look drab fairly quickly.

Pick plain cupboards

Grooves and details on kitchen cupboards can become a haven for dirt and grime if they’re not cleaned regularly. Plain cupboard doors are a low maintenance alternative that won’t look dated and can be cleaned or repainted easily if need be. They’re also usually a cheaper option so they’re ideal if you’re looking for a budget-friendly style.

Skip the carpets

Carpets are comfortable underfoot but they show stains and dirt quickly and can be expensive to replace – particularly if you have several investment properties to maintain.

Similarly, if you’re allowing pets in the property, carpets won’t last very long and will need vacuuming often to look clean and tidy, so they’re not a good investment.

Hard flooring materials, like tiling or laminate flooring, are far more durable and won’t need refinishing, so they’re more cost-effective for landlords too and easier to maintain for tenants living in the property too.

Final thoughts

When furnishing a rental home, make sure that you’re considering longevity with every choice. It’s tempting to choose the cheapest option, but this can be a false economy, as you’ll wind up replacing or repairing things more frequently.

Instead, opt for materials or fixtures that are built to last and can stand up to wear and tear, however long your tenants are living in the property. Not only will these options make for an easy property for landlords to maintain but they will also help tenants to keep their home clean and tidy too.

Meeting the Needs of the 2021 Renter

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

Letting services look very different to how they did a year ago. Although business continues (people still need somewhere to live, after all), tenant expectations have dramatically changed and agencies are being forced to adapt their practices to keep transactions moving.

Even when COVID-19 is under control, it’s likely that the pandemic will have irreversibly changed the face of the housing industry. Renters are looking at potential homes through a completely different lens, and faster, contact-free agent services will be the norm. Fostering good relationships between landlords, property managers and tenants will be essential for long-term stability.

So, how can letting agents stay on top of these changes and maintain the trust of their landlords? Here are our top tips for meeting the needs of renters in 2021.

Adapting to Changing Consumer Tastes

Let’s start with one of the simplest adjustments: appealing to new tenant expectations.

Reframing what’s in your portfolio

Faced with many more months of lockdowns and social distancing, tenants will be prioritising space alongside affordability. Boost interest in your listings by focusing on outdoor areas (no matter how small), nearby recreation spaces and interior layout flexibility. De-prioritise emphasis on commuter options, and encourage your clients to stage spare bedrooms and dining rooms to highlight home-office possibilities, with tips on making home workspaces feel welcoming.

Speed up applications

Nobody needs an uncertain, drawn-out application and contract procedure right now, so make your new-tenant process as transparent and efficient as possible. You’ll encourage renters to choose your agency over others and keep landlords happy by filling vacancies quickly. Boost this along using technology (more on that in a moment), and by ensuring safety inspections, cleaning and repairs are carried out as soon as the property is vacant.

Delivering Contact-Free Services

To keep deals moving, the property industry has been pushed to adopt various types of technology much more quickly.

Video walkthroughs

Video tours were previously there to give a flavour of a property, but they’re often now the only way potential tenants will see the property before committing – make sure yours don’t let you down. Software like Giraffe 360, Mattterport and iStaging make it easy to capture professional-quality virtual tour footage from a smartphone the company’s livetour gallery gives you an idea of what’s possible. There’s also an innovative offering suited to new and in-progress developments from DCTR (formerly Doctor Photo) called DCVR.

Digital contracts and eSignatures

Avoid paperwork delays by using digital contracts for tenants and contractors. It speeds up the process of getting signatures and you save yourself the hassle of dealing with physical documents and filing. Compare eSign products for the best price points and look cross-compatibility with any other software you use – this list covers some popular choices.

Building Relationships with Landlords and Tenants

Nurturing your active relationships to protect your current income is the best thing you can do if new business is slow.

Communicate with tenants and landlords

Over the last year, people have faced financial instability, job loss and changes in family circumstances, all of which could be affecting their housing. However, you won’t understand how your clients and tenants (potential or existing) are directly affected unless you ask. Like the application process, fostering transparency will help you navigate any foreseeable issues, either with new tenants or struggling existing clients. The government has excellent guidance that you can pass to landlords or tenants to help support them and build trust.

Managing rent arrears

Discuss solutions for your landlords to remain financially stable even if their tenants are struggling to pay rent due to pandemic-related issues. Rent deferment (postponing rent until it can be paid back in future instalments) is preferable to rent abatement (agreed non-payment for a set period of time), but either is better than having to maintain an empty property, especially if tenants can still cover bills and council tax.

Planning repairs and maintenance

If possible, resolve any maintenance issues that have been delayed due to social distancing measures. Tenants in comfortable properties tend to stay put, and it will prevent landlords being hit with costly repairs in one go. Landlords are allowed to carry out essential work as long as they follow the COVID-19 legislation and current public health advice.

Strategies for lettings agents to overcome challenges in 2021

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

As a result of the global pandemic of 2020, 2021 is a year likely to have its fair share of challenges for many businesses across a host of industries. This is particularly true of lettings agents. COVID-19 has created a lot of uncertainty in the jobs market and the housing market alike. But there are ways that lettings agents can overcome these challenges in the coming year and continue to thrive.

Be prepared to change in the face of the ongoing pandemic

COVID-19 looks certain to remain a huge issue into 2021. But it is possible to have a strategy in place that can deal with a situation that might evolve rapidly. This year has proven that having a strategy that can quickly be adapted is key to success.

Picture of a virus

So, letting agents must factor this type of unpredictability into their plans. Make sure that, going forward, there is a plan B in place that can accommodate the more challenging aspects of the year that might arise.

Rent guarantees could be the answer

Landlords need stability and they need to be able to ensure that their payments will come in each month. After all, they still have their own legal obligations to adhere to, regardless of their tenants’ situations. But with government help drawing to a close, it’s a good idea to ensure that tenants are in a comfortable position financially. Lettings agents need to facilitate conversations between landlords and tenants.

Picture of a rent guarantee Form

There’s no one-size-fits-all approach when it comes to rental agreements but rent guarantee insurance could be the solution to this type of uncertainty. This type of insurance covers the monthly rental income if tenants don’t pay. Most policies cover at least 50% of rental income for peace of mind. It will not only help lettings businesses but also landlords, so it’s a good idea to educate landlords on the rental guarantee products available to them.

The need for flexibility

No-one knows how COVID-19 will shape the market or what the government will put in place, with regards to the furlough scheme and other funding options. Although overall most rents have so far been paid, tenants may find it harder to pay their rent on time as wider economic challenges continue.

So, letting agents and landlords need to be able to offer flexibility during these unprecedented times. Good tenants are bound to have their shortcomings occasionally, but it’s important to offer a grace period wherever possible.

Pay attention to the rules

The pandemic has meant a change in the rules in numerous ways. So, it’s more important than ever to stay up-to-date with the latest legislation to ensure that you’re following the correct ruling.

It’s also important to remember that not all of the changes in ruling will be COVID-19-related. For example, there are new rules affecting wood burning stoves. 2021 will mean focusing on the details at all times, as they can have a big impact on businesses.

Providing a great service has never been more important

In challenging market conditions, the letting agents that really thrive are the ones that prioritise their customer base. In 2021, businesses need to place a far greater emphasis on the service they are providing and really pay close attention to detail.

It’s these differences that will set successful letting agents apart from the rest of the industry. For example, having a strong local knowledge is vital – customers want to be sure that the agents they are working with truly understand the area. It’s also important to follow up on calls and be accessible to customers.

Final thoughts

2021 looks set to deliver challenges that we haven’t seen before. But the key to overcoming these challenges is to face them head on and to be prepared. Letting agents need to use the lead-up to 2021 reviewing their processes and strategies so that they can identify the areas that can be improved.

It’s only through this difficult analysis that businesses can really find the gaps that will set them apart from the competition. While there will no doubt be businesses that fail to make it through the tougher times, if you can survive, there will likely be a bigger share of the market to take advantage of.

How Pest Control Became a Hot Topic for Lettings Agents

About our guest blogger:
Based in Worthing, Lucy studied Economics, Finance and Management before turning her focus towards the property market.  She’s a specialist short/long stay holiday rentals and has written for a number of major industry blogs.

COVID-19 has had an impact on everyone, including lettings agents and the property market as a whole. But one consequence that may have been unexpected is that empty properties have become a haven for pests – something that letting agents are now having to deal with as lockdown measures begin to lift.

Empty properties can be a haven for pests

When pests are allowed free reign over a property, they’ll waste no time in causing havoc – something one student learned to his cost. Oluwageorge Johnson, a student from Nottingham Trent University, left halls at the beginning of March to stay with his parents during lockdown.

Student Kitch covered in pideon excrement Student Living Room covered in pigeon excrement

(Source: Mercury Press)

When he returned six months later, he found that pigeons had invaded his flat and destroyed his property, even leaving eggs and a chick in his kitchen sink. This type of event is far from unique however. Many people have returned from lockdown, having socially distanced themselves elsewhere, to find that unchecked properties, both residential and commercial, are now overrun with pests.

The problem is allowed to grow

The government’s decisions throughout lockdown meant a knock-on effect for pest control in properties around the country. With pest control considered an unnecessary service, many people were unable to utilise pest control services when managing properties.

“A lack of foresight in the early days of the pandemic meant the government forced pest control services to close,” says Mark Stanford of Empire Pest Control “this was a huge mistake; if left unchecked, pests can cause a significant amount of damage and the infestation could worsen, making it more difficult to get the situation under control”.

With the issue allowed to develop while the country was in lockdown, it’s now even more severe than if it had been managed over the course of the pandemic.

Who is responsible for dealing with pest problems?

Pest control has become a hot topic recently and it’s raised a few questions as a result. Primarily, who is responsible for dealing with the situation and does COVID-19 change anything in this regard? Citizens Advice state that it’s not a straightforward issue.

Landlords, for example, are responsible for dealing with an infestation if it is stated in the tenancy agreement that they will maintain the property to a hospitable state, or if the infestation was caused by disrepair that the landlord is responsible for such as a broken window or a hole in the wall. They may also take on the problem if the infestation makes the property unsafe to live in, such as causing illness to the tenants. But in other situations, such as neglect from a tenant, landlords may not be liable for the cost of dealing with an infestation.

A Rat

(Source: Pexels)

Different solutions for different pests

The type of infestation can determine who is responsible for dealing with pest issues, as sometimes tenants need to handle the problem and sometimes landlords are responsible. Landlords need to arrange for pest control if the issue is wasp nests, rats or a flea infestation if this becomes present at the start of a tenancy. It’s the landlord’s responsibility to ensure that carpets and upholstery are fumigated, providing that it is not the tenant’s pets that are the cause of the issue.

However, ants or mice are the tenant’s responsibility to remove. Bees are also an issue that the tenant needs to deal with, as these need to be removed by a professional beekeeper as they are protected.

Likewise, if a wasp nest appears mid-way through a tenancy agreement then the tenant will be responsible for paying for the removal. The intricacies of responsibility make the issue of pest control a difficult one to manage but understanding which types of infestations fall under the obligation of landlord or tenant can make it easier to deal with the problem quickly and efficiently from the start.

Final thoughts

Lettings agents have had a lot to contend with as lockdown measures have begun to lift and the property market adjusts to a new normal. But with so many properties left empty for months at a time, it’s unsurprising that pest infestations are now such a prominent issue.

It’s important that those involved, whether as landlords, letting agent professionals or tenants, stay up to date with the latest government guidelines on how to deal with pest control companies safely. It’s also important to maintain properties as safely and hygienically as possible, so as to prevent further infestations from developing.