3 Ways to protect your rental income

Rental income is an important part of being a successful landlord. Whether you need it to cover mortgage payments and expenses, or you’re taking rental profits as valuable extra income, you might want to check whether you’re doing all you can to protect it.

Here are three steps you can take to help protect the rental income you expect to receive each month:

1. Take out rent guarantee insurance

This is an insurance policy that protects you in case your tenant doesn’t pay their rent. Whether they’re having financial difficulties and can’t afford to pay you or they’re simply refusing to pay, most policies will cover the full rental amount (up to a limit) for between 6 and 12 months. Many insurers also include legal expenses, in case you have to evict your tenant and go through the formal possession claim process.

This is a relatively low-cost safety net that’s well worth considering. So, if you don’t already have insurance to protect your rent, call us on 01268 955001 and we can chat through the cover we offer landlords.

2. Keep voids to a minimum

Voids can have a huge impact on your overall annual rental income and profits. An empty property generates no income but may still be costing you money each month in terms of mortgage payments and bills. So, here are three top tips that should help minimise the gap between tenancies:

• Happy tenants stay longer. The longer your tenancies, the better it is for your cash flow, so make sure you communicate well with your tenant, keep the property in good condition and don’t give them any reason to want to leave.
• Offer what tenants are looking for. Rental standards are improving all the time and tenants’ needs and wants can also change. So, if you haven’t had a new tenant recently, speak to us about what’s most in demand right now. It’s well worth spending a little on updating your rental so that you re-let quickly, to the right tenant, who will pay a good market rent each month.
• Advertise well in advance. As soon as your current tenant gives notice, list the property with up-to-date photographs and for a realistic rent. The last thing you want is to have the property sitting on the market for ages because tenants feel it’s too expensive.

3. Make sure you’re investing tax-efficiently

Receiving rental income is the first hurdle; keeping hold of as much of it as possible is the second! Property tax is a complicated area, so we’d recommend you speak to a specialist adviser, who can make sure you own your rental property and take income and gains from it in the most tax-efficient way.

For more advice on how to protect your monthly rental income or to chat about any aspect of letting and managing property, get in touch with us by phone on 01268 955001 or email lettings@baillie-white.co.uk – we’d love to hear from you!