Landlords, you've got to spend money to make money
Unlike most other forms of financial investment, you’re going to have to put more money into your Buy to Let every now and then. And, although property standards are certainly a lot higher than they used to be and most landlords are happy to spend money on keeping them in good condition, there are still some who take a little convincing to pay out for good quality repairs and upgrades.
The issue for you as a landlord is, if you ignore the little problems, they can quickly get bigger. And before you know it, a leaking shower that only needed a joint tightening and a bit of extra silicone turns into a partial bathroom refurb because water has been getting behind the tiles and soaking into the floor for months. And if you scrimp on quality by either employing the cheapest contractors or buying the cheapest materials, fittings and furnishings, the fixes simply won’t last.
In our experience, although cutting corners might save you money in the short term, it ends up being a false economy. It’s easy to waste money on cheap repairs that only have to be redone within months and the danger is we (or you) will end up spending even more time taking phone calls from irritated tenants and organising works. Plus, if tenants see that you really don’t care about keeping their home in good condition, they’ll either leave or escalate their complaints. And remember, with the legal changes that came into effect in October 2015, if you haven’t responded to their request for reasonable repairs, you probably won’t be able to evict them if you need to - even if they aren’t paying their rent. On top of all that, if your property looks tired and patched up, it’s never going to let to decent tenants at a good market rent.
On the other hand, if you get on to repairs as soon as they’re brought to your attention – either by the tenants or through a periodical inspection – you’ll nip problems in the bud and keep your tenants happy. Paying a fair amount for a good job should mean your property stays looking its best and you shouldn’t need to repeat any work for several years. Decent fittings and furniture should last longer than cheaper versions and will create a better impression for tenants. And all this means that the property is likely to let quickly at a good level of rent, and tenants will stay longer, keeping your voids down.
Don’t forget, if a property needs work we can organise everything and will take care of the smaller jobs without bothering you. For major repairs costing over a certain amount and where you set the limit, we will always speak to you before going ahead.
Finally, there’s the capital value. A property in good condition is likely to be valued at a higher price, which means you should be able to get a better rate if you remortgage and a quick sale if that’s what you want or need to do. It will also give you a better overall yield!
So don’t think of paying out for repairs and upgrades as ‘spending’ - think of it as ‘reinvesting’, because you’ll get it back in lower voids, higher rents and a better capital value.
Top 5 tips:
- Contractors. Go with ones that come recommended, understand lettings legal requirements and are members of trade bodies that allow them to offer warranties and guarantees for their work.
- Avoid doing ‘cash’ deals on repairs/fixtures/fittings. You can’t deduct them from tax and it’s more difficult to make any claims if there is a problem once the job is finished. It’s better to pay 20% VAT once, rather than having to re-do a bad job.
- Put in decent fittings. Cheap ones look cheap and won’t last.
- Use the right paint. Moisture-resistant for kitchens and bathrooms, hard-wearing gloss for woodwork and wipe-clean for the rest of the walls – means you won’t have to redecorate so often. A little more on the product saves a lot on repeated labour costs.
- Carry out periodic checks. These ensure that any small problems are picked up before they become big ones and help make sure the property stays in good condition and if we manage your property for you, this is an essential part of the work we do for you.