Cost of living crisis – how landlords can protect their income

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With the cost of living crisis happening in the UK, some tenants are likely to find it more difficult to meet their rental payments. This means it’s essential for landlords to take steps to protect their income during these tough times. Here we share seven tips on how landlords can do this.

Tenant affordability checks

Make sure the tenant you have already or are about to take on can afford the property and keep up regular dialogue with them. If you work with a qualified letting agent they will be used to checking out tenants to make sure they have the income needed to cover the rent.

Keep your property in great condition

To secure the best rental income and reduce any void periods when the property isn’t let, make sure your property is in great condition and really appeals to what local tenants want.

No deposit option

If you haven’t already, it is worth comparing taking a deposit versus offering tenants a ‘no deposit’ option. This can help you access more tenants, some of whom may have the income to support the rent, but not necessarily the savings to pay for a deposit upfront.

With our no deposit option at Leaders, it means landlords will be indemnified for the equivalent of 7 weeks’ rent, whereas if you take a standard deposit, that’s capped at 5 weeks.

Regular rent reviews

It’s key to make sure you regularly review rents to maximise your investment without overstretching your tenant’s affordability. Not choosing to increase rents for existing tenants, especially if they stay for some years, can oddly cause problems later on.

Not only could you be losing money that could be spent on maintenance or energy efficiency measures, but from a tenant’s perspective, when they do eventually look for a new property, they may feel that rents have ‘skyrocketed’ in comparison to what they’re currently paying.

Reduce risk with landlord insurance

You should purchase landlord insurance in case the worst happens to cover any problems, whether this is from something like a fire or flood, to damage caused by tenants or their visitors.

It’s not just food and energy bills that are rising, the cost of repairs to properties has also gone up and it may be a shock if you have to pay out unexpectedly.

Expert tax advice

It’s always important to check you are paying the minimum amount of tax you need. Property tax is complicated and isn’t separate to your other earnings, so do seek expert property tax advice this year to make sure you have reduced your tax bill by all the costs you can.

If you want advice on protecting your landlord income in these uncertain times, get in touch with your local Leaders branch.

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