Spring is in the air, or at the very least we are officially out of the winter season, so with that in mind and the start of the new financial year, it’s time to dust off your accounts books and see if you could be making more money from your rental property.
Typically, we don’t like talking about money, particularly when it means asking someone for more money for the same product (your rental property), but as a landlord you should be mindful of moving with the times and shifts in the most recent rental values.
At the end of last year the rate at which rental prices increased in London was by 4.1%, almost half as much again as the rise of 2.8% across the rest of England, proving once again that the allure of living amongst the bright lights, or at least within reasonable travel times of it, is still very strong indeed.
If you are lucky enough to already own a buy-to-let property, you’ll be breathing a huge sigh of relief as you will have missed out on the rise in stamp duty when purchasing a second home (see below bands and SDLT Cost - from 1st April 2016).
£0 - £125,000 = 3%
£125,000 - £250,000 = 5%
£250,000 - £925,000 = 8%
Here at Mi-Move we’ve put together a 5-step checklist to see if you’re charging the correct amount for your property…
1) The World Wide Web
The internet is a wonderful place and you can search for almost anything, so this should be your first stop when checking to see if your property is renting for the right amount. Choose Rightmove or Zoopla (the two largest property portals in the UK) to see what has rented recently in your area that is similar in both size and location. It also gives you an opportunity to virtually snoop around the competition.
2) A Change in the Local Landscape
Keep on top of changes to the local landscape, and we don’t just mean the introduction of a post box at the end of the road, although with the closure of many post offices we’re sure this would be a bonus. If there are major housing developments, positive changes to the access roads, openings of large retail stores and supermarkets or extensions to significant transport links into central London this will have an impact on rent prices as it could make your property more desirable.
3) Changes to Your Financial Expenditure
And no, this doesn’t include your children wanting a holiday to Florida. Within reason if your financial circumstances change in relation to your investment property then an increase could be viable. For example, if there is a significant increase in the maintenance costs associated with your rental property, or to assist in keeping up with a rise in mortgage payments on the property. With all requests to increase rent the rise should be fair, realistic and in line with similar properties in the area.
4) Talk to a Local Letting Agent – Hello Mi-Move!
Letting agents with extensive local knowledge will know, as it is their job to do so, what the climate is like in your area at any given time. By this we mean the number of people registering to rent and the number of available properties in the area at a specific time, especially those close to large places of work (such as hospitals, office blocks) and train stations. They also astutely keep an eye on what their counterparts are listing. Here at Mi-Move we can provide a free and honest valuation of your property along with very reasonable rates to become listed as one of our landlords. You’ll see from our testimonials that we’ve been in the property game for a long time and our number one priority is customer service.
5) Check The Tenancy Agreement
If you decide the time, and market, is right to increase the rent by far the easiest time to implement this is when the agreement expires – usually 12 months after signing a new tenant. This way you can simply ask you agent to re-draft the agreement with the change in rent. It is the most common method. There are alternatives but these can be lengthy, speak to your agent to get the best way forward if still inside the tenancy term.
If you think you could benefit from a free rent review, call us on 020 3538 0558, email us at firstname.lastname@example.org or pop in for a chat at our office – 1 Regent Parade, Brighton Road, Sutton, SM2 5BQ.