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Six Ways for Landlords to Cut Costs to Increase Property Rental Profit

By Chris Horne

The days of 10% yields are now all but a distant memory for landlords.

Interest rates are still moving upwards and seem destined to hit 6% by the end of the year.

So what can landlords do to drive up margins & help cashflow. The answer is to cut costs and here are six ways for landlords to do this.

1. Buy cheap – landlords need to be tough negotiators

There is still money to be made in the property market whether landlords buy at auction or they find a residential investment property in the local estate agents or over the internet.

The secret for landlords is to always drive a hard bargain. Landlords should view 50 residential investment properties, put in 50 ‘ridiculous offers’; 49 will be rejected but the chances are one will succeed. Then a landlord will get a buy-to-let bargain. That way a landlords rent will reflect the value say of a £200,000 property but if a landlord has managed to secure a 15% discount their costs will only be that of a £170,000 residential investment property.

2. Landlords need to get the best finance deal

The biggest cost to any landlord is their mortgage. If a landlord can cut this by even a 0.5% that will work out as a cost saving of £62.50 per month on a £150,000 buy-to-let mortgage.

For a landlord to ensure their mortgage is competitive they need to keep checking their rate against the best BTL mortgage rates currently available.

Landlords should never, ever pay the mortgage company standard variable rate, the chances are you will be paying 1-2% above what you need to. Most landlords can save at least 0.5% on their interest rate if they shopped around.

3. Save on managing fees by DIY Landlording

How ever landlords look at it if they get in a letting agent it’s going to cost. For the full management of a landlord’s property this is likely to be between 8-12% of a landlords’ rent. For many landlords this can represent 20% of their annual costs. By landlords DIY, they can boost their profits and cashflow immediately. This gives landlords greater scope to perhaps swap to a repayment mortgage.

In this way landlords will gradually cut their loan repayments because of their reducing mortgage balance.

If landlords think that managing their investment property themself is a daunting prospect then they shouldn’t. There are plenty of Free Assured Shorthold tenancy agreements available and I provide a fully solicitor prepared Free assured shorthold tenancy agreement available for UK landlords to download within the Free Online Property Management software on my site. This saves a landlord £15 for the book, £10 for the Assured Shorthold Tenancy Agreement, £100 for the property management software. In total £125.

4. Landlords must avoid the void

Experienced landlords dread the void. This is the term given to a landlords residential investment property when it is empty. At all costs landlords should avoid this. Many novice landlords who have been told by a letting agent often desperate for business that their buy-to-let property is worth £750 pcm, will then end up with it empty for 3 months only to then have to let it for £600 anyway. Far better is for landlords to have it let at the outset for a realistic rent. Once a void is experienced then a landlord will never get this money back. The average void for a buy-to-let property is probably about one month per annum. If a landlord can cut this to zero then this is about the equivalent of cutting their annual costs by 10%.

5. Competitive insurance

It is very easy for a landlord to over pay for their buy-to-let insurance. Often buy-to-let mortgage companies will try and sell landlords their own insurance product. Never buy this. Buy-to-let mortgage companies rely on the apathy of the average consumer not to check out the best deals through a specialist landlords insurance broker which enables them to charge inflated prices. Landlords should make sure they get a number of quotes and know what landlord insurance product they are getting before they buy.

6. Don’t pay tax

Well prepared landlords should pay little or no tax. Not because they are criminals but because landlords need to be shrewd businessmen as well as good property investors. Tax avoidance is not illegal; it’s what the billionaires do. Landlords should be fully informed about their landlord tax allowances and keep up to date records to ensure that they don’t have to pay out unnecessarily.

Avoiding tax could save hundreds if not thousands of pounds per annum to a landlord. This money can then be re-invested by a landlord in growing their buy-to-let portfolio or cutting their costs further by paying down their debt.

Property Hawk is a site aimed directly at UK Landlords. The site incorporates free property management software that enables landlords to track all their financial data relating to their portfolio. It allows users to print tenancy agreements and other forms FREE FOREVER. The site generates a real time rent book for each property as well as calculating a landlords tax liability. The service is totally free to use at www.propertyhawk.co.uk

Article Source: http://EzineArticles.com/?expert=Chris_Horne
http://EzineArticles.com/?Six-Ways-for-Landlords-to-Cut-Costs-to-Increase-Property-Rental-Profit&id=725940

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Landlord Property Management Software – Evaluation and Analysis of Different Letting Software

By Chris Horne

What is property management software?

Property management software or as it is sometimes known, letting software is software that allows landlords to manage their rental business by enabling them to organise and store the data relating to a landlords letting business. There are a whole range of software companies that produce suites of property management software for landlords, often with various levels of functionality.

What functions can property management software be used for?

There are a whole range of functions that property management software can perform. The main things that property management software is used for in managing a landlords business is as follows:

∑ Recording rental payment from tenants

∑ Providing a financial overview of a landlord’s portfolio in respect of the buy-to-let mortgages secured against the residential investment portfolio and the total value of the residential investments

∑ Enabling a landlord to record key dates such as the dates for the landlord safety certificates or renewal of the landlords buy-to-let insurance

∑ Most landlord software packages will provide the key lettings forms required by the landlord such as: tenancy agreement, section 8 notice, section 21 notice for possession, section 13 notice for increase of rent, inventory.

∑ The landlords and tenants contact details

∑ A means to calculate a landlord income tax liabilities

There is some property management software which offers much more than these basic functions. These ‘high end’ property management software suites are very much aimed at the professional full time landlord who probably has a portfolio of at least 10 residential investment properties and derives their main income from letting out residential property to tenants. The sort of additional functionality available in these property management software packages would be:

∑ Repair monitoring & maintenance schedules

∑ Invoice facility

∑ Preparation of advertising material relating to residential investment properties

∑ Account reconciliation

∑ Creation of a landlords own website to host their rental properties

∑ Financial report writing facility

For most landlords with several properties a basic property management software package is probably adequate to carry out their day to day landlord duties. In fact a more comprehensive property management software suite could be a disadvantage. This is because their complex nature featuring all the ‘whistle & bells’ means that for a landlord to learn how to operate the ‘high end’ property management software will take a landlord many hours if not days to understand and master. It will often mean a landlord having to go on courses and being instructed by the property management software company. This is both costly in terms of the landlord’s time and the overall price of the property management software package.

How much does it cost?

For the basic property management software package landlords should budget about £100. This type of landlord property management software will enable the landlord to carry out the basic management functions relating to their portfolio. For the more advanced facilities a professional landlord would have to pay several thousands of pounds for a full property management software suite. This will of course include full support by the software company and will probably include training on how to use the property management software.

It is also effectively possible for landlords to obtain property management software for free. There is one UK website for landlord’s called Property Hawk that provides within the website the basic functions of landlord software referred to earlier. Technically it isn’t the same as property management software in that it does not sit on the individual landlord’s computer. Instead the landlord’s data is kept on the website’s server. This means that the landlord can only access the data through an internet connection. It does have the advantage that the data relating to their residential investment portfolio is available to the landlord using any computer at home work or any where else they can get an internet connection, rather than only being available on their single chosen PC. It should also mean that should the landlord suffer a hardware failure or loss, that the landlord’s critical property management data is not lost.

What software should a landlord choose?

Landlords should consider carefully the advantages and disadvantages of using specialist property management software. For those landlords with a single property the advantages of purchasing a specialist package of property management software is probably not going to be worth the £100 purchase price given that much of the data recording can be done using a simple spreadsheet. Those landlords with several properties may find the added facilities of property management software useful in organising their residential investment portfolio, particularly if they are unfamiliar with spreadsheets or are not naturally good at organising their lettings business. Those landlords that use the Internet regularly and have good internet access at home, work or even remotely through 3G or WiFi may consider that a web based application is preferable; particularly if it is free to use.

For professional landlords that may employ specialist staff an outlay on ‘high end’ property management software amounting to several thousand of pounds may be justified for their residential investment business. This is because the efficiency savings may allow a landlord to quickly recoup the initial expenditure of the property management software package.

Chris Horne is an experienced landlord and property professional who now runs the website Property Hawk, a site aimed directly at UK Landlords. The site incorporates free property management software that enables landlords to track all their financial data relating to their portfolio. It allows users to print tenancy agreements and other forms FREE FOREVER. The site generates a real time rent book for each property as well as calculating a landlords tax liabilty. The service is totally free to use at http://www.propertyhawk.co.uk

Article Source: http://EzineArticles.com/?expert=Chris_Horne
http://EzineArticles.com/?Landlord-Property-Management-Software—Evaluation-and-Analysis-of-Different-Letting-Software&id=747373

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Six Ways for Landlords to Cut Costs to Increase Property Rental Profit

By Chris Horne

The days of 10% yields are now all but a distant memory for landlords.

Interest rates are still moving upwards and seem destined to hit 6% by the end of the year.

So what can landlords do to drive up margins & help cashflow. The answer is to cut costs and here are six ways for landlords to do this.

1. Buy cheap – landlords need to be tough negotiators

There is still money to be made in the property market whether landlords buy at auction or they find a residential investment property in the local estate agents or over the internet.

The secret for landlords is to always drive a hard bargain. Landlords should view 50 residential investment properties, put in 50 ‘ridiculous offers’; 49 will be rejected but the chances are one will succeed. Then a landlord will get a buy-to-let bargain. That way a landlords rent will reflect the value say of a £200,000 property but if a landlord has managed to secure a 15% discount their costs will only be that of a £170,000 residential investment property.

2. Landlords need to get the best finance deal

The biggest cost to any landlord is their mortgage. If a landlord can cut this by even a 0.5% that will work out as a cost saving of £62.50 per month on a £150,000 buy-to-let mortgage.

For a landlord to ensure their mortgage is competitive they need to keep checking their rate against the best BTL mortgage rates currently available.

Landlords should never, ever pay the mortgage company standard variable rate, the chances are you will be paying 1-2% above what you need to. Most landlords can save at least 0.5% on their interest rate if they shopped around.

3. Save on managing fees by DIY Landlording

How ever landlords look at it if they get in a letting agent it’s going to cost. For the full management of a landlord’s property this is likely to be between 8-12% of a landlords’ rent. For many landlords this can represent 20% of their annual costs. By landlords DIY, they can boost their profits and cashflow immediately. This gives landlords greater scope to perhaps swap to a repayment mortgage.

In this way landlords will gradually cut their loan repayments because of their reducing mortgage balance.

If landlords think that managing their investment property themself is a daunting prospect then they shouldn’t. There are plenty of Free Assured Shorthold tenancy agreements available and I provide a fully solicitor prepared Free assured shorthold tenancy agreement available for UK landlords to download within the Free Online Property Management software on my site. This saves a landlord £15 for the book, £10 for the Assured Shorthold Tenancy Agreement, £100 for the property management software. In total £125.

4. Landlords must avoid the void

Experienced landlords dread the void. This is the term given to a landlords residential investment property when it is empty. At all costs landlords should avoid this. Many novice landlords who have been told by a letting agent often desperate for business that their buy-to-let property is worth £750 pcm, will then end up with it empty for 3 months only to then have to let it for £600 anyway. Far better is for landlords to have it let at the outset for a realistic rent. Once a void is experienced then a landlord will never get this money back. The average void for a buy-to-let property is probably about one month per annum. If a landlord can cut this to zero then this is about the equivalent of cutting their annual costs by 10%.

5. Competitive insurance

It is very easy for a landlord to over pay for their buy-to-let insurance. Often buy-to-let mortgage companies will try and sell landlords their own insurance product. Never buy this. Buy-to-let mortgage companies rely on the apathy of the average consumer not to check out the best deals through a specialist landlords insurance broker which enables them to charge inflated prices. Landlords should make sure they get a number of quotes and know what landlord insurance product they are getting before they buy.

6. Don’t pay tax

Well prepared landlords should pay little or no tax. Not because they are criminals but because landlords need to be shrewd businessmen as well as good property investors. Tax avoidance is not illegal; it’s what the billionaires do. Landlords should be fully informed about their landlord tax allowances and keep up to date records to ensure that they don’t have to pay out unnecessarily.

Avoiding tax could save hundreds if not thousands of pounds per annum to a landlord. This money can then be re-invested by a landlord in growing their buy-to-let portfolio or cutting their costs further by paying down their debt.

Property Hawk is a site aimed directly at UK Landlords. The site incorporates free property management software that enables landlords to track all their financial data relating to their portfolio. It allows users to print tenancy agreements and other forms FREE FOREVER. The site generates a real time rent book for each property as well as calculating a landlords tax liability. The service is totally free to use at www.propertyhawk.co.uk

Article Source: http://EzineArticles.com/?expert=Chris_Horne
http://EzineArticles.com/?Six-Ways-for-Landlords-to-Cut-Costs-to-Increase-Property-Rental-Profit&id=725940

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