Cutting Costs Landlord

As a landlord, you have several responsibilities and necessities that you have to fulfil and while some are cost-free, others can rack up a bill if not handled properly. Everything from insurance to maintenance costs and mortgage fees can all add up and cutting costs can feel like a necessity. However, it’s important not to cut costs in the wrong places – poor insurance, reduced maintenance or poor quality repairs can lead to more hefty costs in the future. So where should you cut costs? We’re taking a look at what landlords typically need to pay out and where in these costs they could cut down how much is being spent, without compromising on quality.

The Costs Of Being a Landlord

When it comes to costs associated with being a landlord, the numbers can be daunting at first glance. While tenant rental payments will often cover these costs, the profit made at the end can feel minimal or even non-existent with the rising cost of living. For tenants, the fear of rent payments being raised can be just as daunting, and so for Landlords, understanding just what costs you need to cover and how you can better manage these payments can help improve the situation for both you and your tenants. The common costs include:

  • Mortgage payments and Interest – If you are paying off your property via a mortgage while letting out to tenants, the mortgage payments and interest payments are likely to be one of your highest costs, particularly as interest rates rise. 
  • Taxes – The taxes you need to pay may depend on the property type, the local council and the tenant types, however, you can usually expect to pay Income Tax, stamp duties and other housing-based taxes as you grow or manage your property portfolio. 
  • Insurance – Landlord Insurance is a crucial part of renting out properties and getting the right policy for you and your property can protect you and your tenants long-term. 
  • Maintenance – Maintenance costs are an ongoing and essential part of being a landlord, from gas and electricity assessments and checks to roof maintenance, gutter cleaning and more.
  • Repairs – Repairs are another essential cost for a landlord. If something goes wrong at the property, you may be liable for covering the cost of repairs, so you should always be prepared to pay out this additional cost.

So, How Do I Cut Down On Costs?

It can be tempting to forgo certain things to cut down on costs, but as a Landlord, there aren’t many things you can go without if you want to provide safe, comfortable and legal property. You have a legal requirement to offer a property that is suitable to live in and in a suitable state of repair and for that reason, you need to be careful where you cut down on costs. All hope is not lost, however – some key places you could look into reducing or better managing your property include:

  • Get the right insurance for your situation – Having an insurance policy that covers exactly what you need without over or under-insuring yourself could make a significant difference to your outgoing costs. If you have more than one property, for example, a Landlord’s Portfolio Insurance policy could help you to get a discount on the properties you need to ensure, reduce admin costs over time and keep all properties on the same, concise policy. If you only have one property, a standard policy will suffice but we can help you find the perfect premium for your situation. However, while it isn’t a legal requirement to have insurance, this is one area that you don’t want to skimp – a good policy can protect you in case of any damage, tenant-caused issues, claims made against you and more. While it’s an outgoing cost, it may save you money in the long term. 
  • Learn some DIY – Taking some time to learn some basic DIY for a few key maintenance tasks could help you avoid having to call out a professional for every job. While some tasks, such as gas management or rooftop repairs, should be left to the professionals, there are plenty of tasks you can undertake yourself. Learning how to re-apply sealant on white goods, paintwork on scuffed walls or minor repairs around the property could help save money over time. 
  • Rent Guarantee Insurance – With rent guarantee insurance, you can avoid late fees and other penalties with your lender (where applicable) if your tenant is unable to pay their rent on time. This insurance policy protects you financially by providing you the money required to pay off your own expected bills such as mortgage payments or fees, and helps you to avoid any arrears building up.
  • Self-manage your properties and tenants – With a good management system, you could forgo paying out for an agent by managing the properties and tenants yourself. If you don’t feel confident enough to do this, this may not be a good cost-cutting measure but for those with the time, confidence and organisational skills to do so, it could be a way to reduce how much you’re paying out for an agent, or remove that cost completely. You should always seek advice first, however, if you are unsure. 

For more information about our Landlord insurance policies, including rent guarantee insurance and portfolio insurance, we are on hand to help. Contact Ashburnham Insurance on 0800 1696137.

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