Becoming a landlord is an appealing prospect to many, with the opportunity to make long-term investments. However, there is also a common belief that becoming a landlord is a way to get rich quick, but this is rarely the case. In fact, being a landlord can be a lot of hard work, requiring dedication, knowledge, and skill to turn a profit.
To help boost your earnings, here are 5 ways to become a more profitable landlord.
Treat Being a Landlord as a Business :
Firstly, in order to boost profit, you need to know your figures. This means more than calculating how much you can afford when looking to buy property, but also fully understanding the actual return on investment. This is where rental yield is essential.
Calculated as a percentage of the property’s value, yield shows yearly rental income compared to the investment price. The higher the percentage, the higher the yield and therefore, the bigger the income. Read here to find out more about rental yield.
Stick to Areas You Know :
When investing in property, it may be tempting to buy in another location that offers more attractive rental yields, or an area has been deemed as up and coming. However, this may mean buying in the property market that you are unfamiliar with, which can pose a larger risk.
As such, it may be a good idea to stick to areas you know. This is particularly true for early investments, as securing a profit is essential to building a successful portfolio.
Invest in Property Upkeep :
In order to boost the profitability of your portfolio, you may want to spend as little money as possible. While this works in theory, properties require continual upkeep and investment.
Often, this required some simple DIY, such as repainting a property before a new tenant moves in. Although this is an additional expense, a clean and modern interior could make your property more attractive to prospective tenants and boost rental value.
Ensure Tenants are Happy :
There is one thing that landlords dread: a vacant property. Not only does this mean zero income – while the mortgage, council tax and insurance must still be paid – but an empty property is also at a higher risk of being broken into.
When aiming to keep a property leased, think about the needs of your tenants. After all, happy tenants are likely to stay for a longer period, reducing turnover. To do this, in addition to property upkeep, thoroughly screen applications and address maintenance issues in a timely manner.
Consider Letting Through an Agent :
Lastly, in order to increase your profit margin, you could consider letting as a private landlord. However, this can be time-consuming, meaning you would be responsible for dealing with tenant screening and repairs. In this instance, it may be a good idea to let through an agent. While this will carry a monthly fee, it can save you a lot of time – especially if you own multiple properties – allowing you to build your property portfolio or continue to work.
Being a landlord can be difficult, but it can also be rewarding, both personally and financially. To help you get more out of your portfolio, you could consider these tips. However, these suggestions alone are not enough – it is also important to thoroughly research every potential investment.