For buy-to-let owners, September’s mini-budget and subsequent ‘mortgage meltdown’ was not welcome news.
The sharp increase in mortgage rates has left many owners of buy-to-let properties concerned that their dependable investment could turn into an unaffordable burden, leaving them with two options:
Increase the rent and hope their tenant can afford it, or sell the property, which for many is their pension pot.
“At Smarter Rent, we’re hearing from landlords concerned they are going to lose their retirement fund,” says Founder, Adrian Sutherland.
Whilst there’s no silver bullet, making sure you are getting the most bang for your buck from your property should be a landlord’s number one priority over the next 12 months.” continues Adrian.
While much is out of their control, there are certain measures landlords can take to ensure they are reducing the risk of being left out of pocket.
“Rental income is affected by many factors, which landlords don’t always have in-depth knowledge of. At Smarter Rent, we use decades of data and experience to identify these and understand how to optimise them.”
Adrian offers five key considerations for landlords managing their buy-to-let:
1. Think about your property’s audience to ensure top returns, think about your property - where it is and who is going to pay the most money for it and then spec it out accordingly.
“One of the biggest mistakes amateur landlords make is they don’t think about their property’s audience,” says Adrian “A one-bed in Weybridge is ideal for a commuter looking for a comfortable base to travel to and from London, so kit it out with a desk, speedy Wi-Fi, and a good coffee machine.
A local family looking for a home in Richmond is going to want extra space for children, good quality fixtures and a comfortable home from home.”
2. Avoid seasonal highs and lows
One way to guarantee a higher income is holiday lets - but these take a huge amount of management and rental income varies wildly between peak months and the summer and Christmas lulls.
There is a happy medium with 1–12-month rentals - long enough to attract good quality tenants, short enough to charge that bit more - however, landlords need to be savvy.
When does the property become vacant? Do you have gaps over Christmas? Flexible contracts and timing the end of deals can avoid your property from sitting empty.
Some agents also guarantee rental income at a fixed amount for additional peace of mind.
Pennie Withers
3. Create a killer listing
Where your property appears online and how it looks is paramount.
Rightmove, the UK’s largest online portal, is the obvious choice, but it’s also where your competition will be. Astute agents can market across hundreds of websites.
Don’t forget, first impressions count - professional photographs play a key role in rental listings and a good quality furniture pack will ensure your prospective tenants can imagine themselves living there.
4. Consider your tenant’s costs too
The rising cost of living is subjecting tenants to a double whammy when coupled with rising rents. In a long-term rental, where the tenant is responsible for bills, making your house as efficient as possible could give your property the edge.
“At Smarter Rent, we are working on a portfolio-wide goal to reduce energy bills by 50%. This will help ease the pressure for billpayers and will help our landlords comply with the EPC (Energy Performance Certificate)changes coming into force in 2025.”
5. Do your tenant's due diligence
Reference checks are crucial to determining whether a prospective tenant is reliable and able to keep up with monthly rental payments.
However, they only go so far in ascertaining a tenant’s suitability.
Charging rent upfront can give additional security. And if you rent through an agency, look for one that’s signed up to the Tenancy Deposit Scheme - you’ll have a third party responsible for holding the deposit, managing repayments, and dealing with any disputes.
Smarter Rent is a property specialist operating in Surrey, Berkshire, and Southwest London.
They manage over 250 properties for owners and investors, taking the hassle out of buy-to-let and getting their clients on average 30% more cash in their pockets.
Adrian Sutherland Founder of Smarter Rent
