Portfolio Landlords – How you can manage your extra income
Sometimes your cash may become freed up from a sale of a property, rental income from a portfolio or savings. Here we discuss what’s the best thing to do with your spare cash?
Improving existing properties? Expanding your portfolio? Lowering mortgage balances?
Each option has its pros and cons. There is always a possibility that properties will require upkeep and maintenance to meet health and safety regs. Whilst maintaining the property at a certain standard, it also important ot note, what can be done with minimum costs that could potentially boost the rental income. E.g. Re-painting a property can refresh an old property, and can be a game changer when a tenant is viewing a property. If the money’s there, take advantage of a void period and refurbish parts of the property that need it, this is most likely going to be the bathroom or kitchen area, this way the works get done and you can achieve a higher rent on the property if finished to a good standard. The bigger refurbishments, could be to add an additional room, this way you could be achieving hundreds of more pounds a month. Just make sure that when considering refurbishment, make sure it is still affordable to tenants, you may also need to take in consideration additional costs for HMO licensing if you wish to extend the property. (e.g more rooms).
Another option is to add to your portfolio, meaning your cash will be spread between investments. This is a key component if you are a keen Buy to Let landlord, however, with all property there are certain risks to take into consideration and it is worth doing your research. Make sure you take your time to find the right property and appoint the right agent to manage it once purchased. At the end of June this year more than £1bn cash lump sums were withdrawn from pension post by around 85,000 savers. Whilst there is only speculation of how much of this may have been invetsed in property it will be interesting to see how many more pensioners may choose early access to their savings and invest in buy to let instead. #Rentisthenewpension.
Whilst other landlords opt for putting their property income into savings, and whilst it is beneficial having money in the bank for repairs and emergencies, the banks generally offer a low interest. Another way to use the cash from property is to overpay on their mortgage if the lender allows it. This is worth considering if your mortgage is a higher rate than the interest in your savings. You can lower the loan-to-value (LTV) of your mortgage giving you more and cheaper options when it comes to remarketing.
If you are a portfolio landlord and would like to discuss your options and how we can help maximise your portfolio, please contact our team on 02920489000 | firstname.lastname@example.org
Published: November 30, 2015BACK TO NEWS LIST