11 Tips to maximise BTL property investment profits

Buy to Let Profits

The higher your profits, the better your lifestyle

Whether investing for the first time or a seasoned property investor, you should set out with a business plan for each buy-to-let (BTL) property you purchase. The idea, surely, is to make as much money as possible with the least amount of effort. The more money you make, the closer you get to your life goals. The less effort you need to put in, the more time you’ll have to enjoy your life.

Here are my 11 top tips for BTL property investors. Incorporate these into your property investment strategy, and you should own a property portfolio that maximises your profits and helps you achieve the lifestyle you desire.

1.      Buy the right property in the right area

It all starts with this simple solution: buy the right property in the right area. The right area is one which exhibits the five fundamental keys to profitable property investment – shops, schools, transport links, major employment, and major investment (infrastructure and regeneration). The right property is the every person property – the one that will appeal to the widest audience in the location in which you invest.

2.      Vet every prospective tenant properly

It’s your property, but the tenant’s home. You must make sure that you get a tenant who will respect your property and treat it as their home. You must vet tenants properly. Check their references (landlords and employers, past and present), and run a credit check.

3.      Let the property fast, with short void periods

The longer your property remains empty, the lower your profits will be. You must act fast and market your property effectively to get it rented as soon as possible when a tenant leaves.

4.      Always rent at the right price

Make sure you ask (and charge) the right rental price for your BTL investment property. Ask too much, and it won’t rent easily – you’ll suffer longer void periods. Charge too little, and you won’t maximise your cash flow. I’ve found that there are 24 questions to confirm the rental value of an investment property. Make sure you ask them.

5.      Make sure you maintain your investment property properly

It is essential that your property is well maintained. A well-maintained property is more attractive to tenants. Tenants in the property are more likely to stay longer and pay higher rents. Well-maintained properties hold their value better when the market is falling, and improve their value faster when the market is rising.

6.      Modernise bathrooms and kitchens first

Most rooms in a property are simple boxes. Areas to fill with furniture. The kitchen and the bathroom are different. These are the two rooms that can really sell a property. Keep these updated and looking good. Make sure white goods in the kitchen are clean and in working order. And get rid of that avocado green bathroom suite!

7.      Look after your tenant

Void periods are the biggest danger to BTL profits. While your property sits empty, you must still pay the mortgage, council tax, utility bills, and other costs… with no rental income. You must do all you can to avoid void periods. One of the best ways is to look after your tenant. For example:

  • Keep in touch with them
  • Inspect the property regularly
  • Take care of maintenance issues promptly
  • Give them a contact in case of emergencies

8.      Check on your tenant before the tenancy is due to end

You know when the tenancy agreement is due to end. Don’t leave it until the last minute to check if the tenant wishes to stay. A couple of months before, ask them if they plan to remain or move on. You’ll have plenty of time to avoid a lengthy void period if they plan to move.

9.      Keep on top of landlord laws

Landlord laws are constantly changing in the UK. If you don’t comply with them, you could find yourself on the wrong end of a big fine (thousands of pounds for some offences). Ignorance of the law is no excuse.

10. Use an investment property manager

OK, so far you may have noticed that there’s quite a bit of work involved in owning a BTL investment property. If you own a portfolio of properties, the amount of work is multiplied with each additional property. Not my idea of property investment. I want to make as much money as possible from property investment with the least amount of work.

The answer is to hire an investment property manager to do the day-to-day work involved in owning BTL property. By doing so, you’ve taken care of tips 2 to 9 above. Now, wasn’t that easy?

11. Get good tax advice

How you structure your property investment can affect your tax liabilities. For example, setting up a limited company to invest in property may result in a lower tax bill. You should take tax advice before investing, and use a tax specialist to help you reduce tax liability on your property portfolio.

And that’s it! My top 11 tips to maximise profits from your BTL investment. Of course, this isn’t an extensive list, and the best strategies and methods for you will depend upon your individual circumstances: which is why we offer all investors a free property investment consultation. To book yours,  and to discover where the best places to invest in property UK are, contact Gladfish today on +44 (0) 207 923 6100

Cheers,

Himansu Joshi

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