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Ways to maximise your rental income

1

A buy-to-let investment can still be lucrative despite UK property tax changes in recent years. There are many ways to maximise your rental income and boost your profits.

This guide looks at ways to either maximise your income or generate long-term capital gains.

7 Ways to maximise your rental income

1. Set up a limited company

Setting up a limited company to buy investment properties in the UK might reduce the tax you pay on your rental income, thus maximising profits. Speak to somebody who specialises in tax for advice on the best course of action.

2. Raise the rent

Undertaking regular rent reviews is a great way to maximise your income. Keep a regular eye on market conditions, average rents, and demand in the area. If rent prices have gone up, consider raising the rent but do bear in mind this doesn’t come without the risk of unsettling a long-standing tenant. It might be worth using a letting agent to negotiate a rent rise with your tenants to avoid any awkwardness or fallouts.

3. Review your mortgage

Regularly review the interest rates on your mortgage. With a wide range of buy-to-let products available and with interest rates at a record low, you could substantially cut down your biggest costs. Speak to a mortgage broker specialising in buy-to-let mortgage products. The team at John German will be happy to put you in touch with APR Money Limited.

4. Claim every tax-deductible

Another way to maximise profits is to claim every tax-deductible. An accountant with specialist property investment knowledge will help to reduce your tax bill. Remember to keep receipts of all your expenses paid, including those for repairs and maintenance.

5. Consider an HMO

A house of multiple occupation (HMO) is renting out rooms to several different tenants. Rental yields for an HMO property can often be as much as three times as high as single lets. Whilst considering an HMO, you will need to weigh up the pros and cons. The HMO market is highly regulated with big fines, and looking after an HMO requires a higher level of management and planning.

6. Add a bedroom

Adding bedrooms can lead to an increase in capital growth over time and bring in additional rental income. For instance, adding a bedroom to a two-bedroom property could increase the rent by up to £1300 a year, depending on the area. However, before you start adding any extra bedrooms, be sure to research the local rental market. Calculate the outlay against any rent increase and capital growth. For structural changes, consult the local planning authority.

7. Refurbish the kitchen

Drive-up demand and rent by refurbishing an outdated kitchen. This doesn’t have to be costly, there are some very simple, inexpensive adjustments you can make. Quick wins include replacing worktops and doorknobs, adding chrome fittings, and repainting cupboard doors. Check out interior design websites and Pinterest for inspiration.

 

To receive a FREE guide on boosting your rental income along with expert advice on growing a property portfolio SUBSCRIBE HERE.

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Date Posted

September 8, 2020

Article Category

Letting

Author

Katy Storer

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