Becoming a landlord is a full-time career, especially if you plan to rent more than one property to tenants. Not only will you need to set the right rental fee to enjoy a healthy return on your investment, but you will also need to regularly communicate with tenants and fix essential repairs.
If you want to retain tenant loyalty, lower your overheads and boost your cash flow, find out how to become a successful landlord in four simple steps.
Step 1: Adopt a Business Mindset
Many landlords fail to effectively manage their rental properties because they don’t view them as a business. However, property rentals should never be viewed as a hobby. To enjoy great success in the property market, you must adopt a business mindset, which can help you to avoid frustrating your tenants and experience a bigger profit margin.
For example, do you have a backup contact for a tenant when you head off on holiday? Are you setting the rental income aside in a savings account or are you frivolously spending the money? Do you quickly respond with answers to your tenants’ queries?
Ask yourself the following questions and attempt to adopt a more professional attitude towards your business, or it could lead to vacant properties, a small savings account, and a poor reputation.
Step 2: Tax Breaks with SPV Mortgages
If you own many properties, set-up a Special Purpose Vehicle (SPV) Limited Company. SPV mortgages have been designed to provide landlords with greater tax efficiency if they own a portfolio of buy to let properties.
An SPV mortgage will provide:
- Better tax breaks for mortgage interest relief
- A £2,000 tax divided allowance
- The ability to add a son or daughter as a shareholder to benefit from their dividend allowance
- Use the net profit to fund additional property purchases
Find out more about ltd company buy to let mortgage to make an informed choice.
Step 3: Respect Your Tenants
Every landlord must aim to develop a good relationship with their tenants, as they will be more likely to pay their rent on time, care for the property and renew their lease in the future.
Even if you do not personally like a tenant, it’s vital to put your emotions to one side to maintain a harmonious relationship. Always treat each tenant with dignity and respect, and don’t be tempted to drop in unexpected; otherwise, they might feel they have no other choice but to hand the keys back to you, and you’ll be forced to find a new occupant.
Step 4: Stay on Top of Repairs
A dilapidated property will make a tenant want to run for the hills, and it could also lead to various legal issues if you fail to adhere to your responsibilities. For example, every landlord in the UK is legally required to meet safety standards, which can range from gas and electrics to drainage and security.
It’s essential to respond to issues as soon as they are reported by a tenant, which will ensure you adhere to health and safety standards and become a trusted landlord.