Property has always been seen as a good investment because it gives steady rates of return and because people will always want homes, offices, and other places to live and work. But, no matter how well your real estate business goes, there are always ways to save money.
Any money you can save on your investment only helps you get a better return, so it makes sense to find out if you are missing any chances.
In this article, we’ll look at some ways you might be able to save money on your investment property. Whether you already own several properties or are just starting out with your first buy-to-let business, there are always ways to save money and cut costs.
Check on the mortgage
The mortgage is without a doubt the biggest single cost of any rental property. So, it only makes sense that you’d want to make sure you’re getting the best deal. If you run a lot of properties, it can be easy to forget about mortgage deals and when you can start a new one.
Since interest rates are going up, having a flexible rate could be expensive right now. Locking in a short-term deal could make the most sense and save you a lot of money while we wait for changes in the base rate to calm down and decrease. At Western Lettings Glasgow, our team will be happy to set up a time for you to meet with our own independent mortgage adviser for a free consultation where you can find out about your choices. If this sounds like something you could use, feel free to get in touch.
Invest money to save money
Keeping a property in good shape is a significant expense that every landlord has to think about. But it’s interesting that in many cases, owners would be better off putting more money into the property when they buy it rather than spending money on repairs.
In a simple case, if a renter has problems with the boiler and you have to call a plumber to fix it, it can end up costing you a lot more to fix the damage over and over again than to buy a new one.
Get the best deal with your insurance
It is the law that anyone who rents out a property must have rental insurance on that property. So, you might think that this is a cost you can’t avoid and that you have to pay as you can’t rent out a property without it. Yes, that’s true, but that doesn’t mean all insurance is the same.
When you first got landlord insurance, you might have gone with a company you knew well or picked the easiest choice. However, some landlord insurance plans are way more expensive than others. It makes a lot of sense to look into your insurance plan and compare it to others that are offered.
You can lower your costs by doing things like raising the policy’s deductible or looking into the details of what each policy gives.
Keeping utility costs down
There are a few things you can do as a landlord to lower your monthly utility bills and make your rental home more energy-efficient:
- Invest in energy-saving upgrades. It’s a great idea for landlords to make their homes more energy-efficient. Consider getting new tools and fixtures that use less energy, like low-flow toilets and LED lights. Over time, these improvements can save you money on your energy bills and make your property more appealing to people who might want to rent it.
- Set up separate utility metres for each rental unit. Most flats and houses already have their own utility metres, but if your investment property is a recently converted home that now has several rental units, you should make sure that each one has its own utility metre. This can help you escape having to pay for the utilities your tenants use and instead make them pay for it. This can also help renters be more careful about how much they use utilities, which can lower their monthly bills.
- Think about alternative energy sources. For example, you might be able to use solar panels or heat pumps to power your investment home. People who own leasehold homes or apartments in a residential building will have to talk to the management company or freeholder to find out if these options are possible or have already been looked into. Even though these choices may require a big investment up front, as a long term investment they can increase the value of the property, save you money in the long run, and make your property more appealing to tenants who care about the environment.
Cut your taxes on rental income
There are actually a lot of ways to pay less tax on your rental income, and it may make the most sense to work with an accountant who has helped people with a property holding about the same size as yours. They will be able to give you the best advice for your case based on what they know.
Some good ideas include starting a limited company instead of working as an individual to make sure that your tax situation is as good as possible. It is also important to note that you should make sure you are claiming all of the right costs.
There are many ways that landlords can save money on their rental properties. Every landlord can do this, whether it means working with skilled lawyers or just making sure that all of their costs are as low as possible.
In conclusion, property investment offers a compelling opportunity for both seasoned and novice investors alike. The property market presents a diverse array of property types, each with its own potential for growth and rental yield. However, it is crucial for any prospective property investor to tread cautiously and be well-informed. Engaging a knowledgeable mortgage broker can help navigate the complex landscape of borrowing and buy-to-let mortgages, ensuring that mortgage payments align with rental income. While the allure of property investment is undeniable, one must always take into account factors such as the purchase price, market value fluctuations, and potential pitfalls that could arise. A vigilant property investor, armed with the right information and a keen awareness of the market’s dynamics, can turn property investment into a fruitful venture.