How you can help your landlords be profitable and keep their costs low [+ podcast]
Landlords' properties are their biggest assets, and choosing the wrong agent or trying to go it alone can affect their returns. Hamza Anwar, Director at Martin & Co Blackpool, explains how your estate and letting agency can help landlords maximise their profits.
Speaking as both a letting agent at Martin & Co Blackpool and as a landlord, we can't do rentals like we did 20 years ago. The market has changed. Customer demand has changed. For a property that you own or manage, you've got to think about maximising profits. With a good agent on their side, landlords can create an attractive home for tenants, avoid fines for non compliance, and keep costs low with their properties managed in the best way.
See their property as a product
You've got to be looking at a property and a house as a product and ask: how do I get that product ready for today's day and age? If your landlords have got a good product, you're going to secure maximum rents and great tenants for them, which will increase the chances of it being a profitable investment.
With the property I own, I put in smart tech and smart locks. I've got a smart Nest heating system in there because I want to deliver the best product and that's what I would like in my home. I secure around 10% more rent than the average on that street. My tenants are more than happy to pay that premium for the good quality product.
After lockdown, everyone values their home a lot more as they are spending more time there. Although we had to invest a little to get the property up to scratch, that's where landlords and agents can increase profit margins in the long run.
Capitalise on quick wins to boost their profits
Similarly, there are quick wins around every corner, things that agents can help their landlords consider. There's value in the service that agents provide to save a landlord time and headaches - and then there's monetary value in how we can help landlords manage their properties in the most profitable way possible too.
Every quarter, our agency's portfolio managers will have a call with our landlords to discuss the performance of their properties, and understand if they want to sell, buy, or expand their portfolios. Something as simple as remortgaging can create an opportunity. We had one landlord who hadn't looked into remortgaging for 12 years, and we realised that they could save a couple hundred pounds a month on their mortgage.
Consider legislation and their bottom line
Helping your landlords to thoroughly prepare for new legislation can also make all the difference to your landlords' bottom line. Take Making Tax Digital as an example. Unless you're a professional full-time landlord, you're probably not going to be set up already and there are going to be systems you'll have to get in place. Your landlords are unlikely to be bookkeepers and accountants by trade so it will take them longer to try and figure it out and get it right.
If they get it wrong, it might mean they pay more tax than necessary. Landlords are probably not aware of all the expenses that they should include too, deducted from their rents. Agents who are already up to date with digital processes can be proactive and help their landlords prepare for this type of legislation, in the most cost-efficient way.