Even though UK property taxes have changed in the past few years, a buy-to-let property investment can still make money. As a landlord, there are many ways to get the most money out of your rentals and increase your earnings. For top tips on boosting your rental income and all your property management needs consider using a high-standard letting agent to help you make sure your property works its best for you.
This guide looks at tips to increase the rental income from a tenancy, or make long-term capital gains.
Ways to maximise your rental income
#1. Increase the rent
Assessing the rent on a regular basis is a great way to make the most money possible. Keep an eye on the market, average rents, and demand in the area on a regular basis. If rental prices have gone up locally, you could consider charging a higher rent, but keep in mind that you might upset a long-term tenant if you do. If you want to avoid awkwardness or a fight with your tenants over a rent increase, you might want to use a letting agent.
#2. Take advantage of all Tax deductions
Another way to make as much money as possible is to take advantage of all tax deductions. Your tax bill will go down if you hire an accountant who knows a lot about investing in real estate. Remember to keep receipts for all the money you spend, even on repairs and maintenance. This can make a big difference as not only can this help to maximise the rental yield but it will minimise any losses to your capital growth when looking for the greatest return on your investment.
#3. Think about a House in Multiple Occupation (HMO)
This is a residential property where the landlord rents out individual rooms to different people, with shared kitchen and bathroom facilities. The rental income from an HMO can often be three times as high as that from a single let. When thinking about whether to rent your property as an HMO, you should weigh the pros and cons. While they can be a way for landlords to maximise their rental income, they will only work with the right property. It’s worth mentioning, there are a lot of rules and fines in the HMO market, and running an HMO requires more management and planning.
#4. Set up a limited company
If you want to buy investment properties in the UK, you might be able to pay less tax on your rental income if you set up a limited company. This will enable you to achieve the best returns possible. Ensure that you are getting the most up-to-date information from someone who knows a lot about taxes to find out what you should do.
#5. Additional bedroom
Adding bedrooms can increase the property value over time and increase the rent you can charge. For example, if you add a bedroom to a two-bedroom home, the rental value could increase by upwards of £1,300 a year, depending on the area. But before you add more bedrooms, you should look into the local rental market. Compare the cost to any rent increases and capital gains. Talk to the local planning authority to make sure the property is suitable for any structural alterations.
#6. Update your old kitchen
By updating an old kitchen, you can make your property stand out, attract tenants, and increase how much rent potential tenants may be willing to pay. You will also add value to the property in the process. This doesn’t have to be expensive. You can start making some very simple, low-cost changes. Quick wins include replacing worktops and door handles, adding chrome fixtures, and painting cupboard doors.
#7. Check your mortgage
Buy to let landlords should check the interest rate on your mortgage on a regular basis. With a wide range of buy-to-let products and record-low interest rates, you could cut your biggest costs by a large amount. This is a great way for landlords to ensure they get the maximum return on investment. Talk to a mortgage broker who specialises in mortgages for buy-to-let property. The staff at Western Lettings Glasgow will be happy to assist you.
Want to make more money from your rentals? The friendly and professional staff at Western Lettings Glasgow can give you expert advice about your property.