The rental market is highly lucrative and full of opportunity, with soaring demand and lists of people looking to rent. As a landlord, you are set to gain a good return on investment; it’s just a bit more complex than it used to be.

Not conducting tenant screening
It’s vital to carry out the right background checks. The last thing you need is to place a tenant who is problematic when it comes to damage to your property or paying rent. Credit checks and references are good ways to ensure you are letting your property to the right tenants.

Not keeping on top of maintenance
It’s imperative to keep on top of your property. Small issues can very quickly become expensive problems if not dealt with quickly. If tenants live happily in a well-maintained property, then this reduces the risk of accidents, claims, or losses in revenue if your tenant decides to leave.

Not conducting inspections
A great way to prevent expensive repairs is to conduct regular inspections of the property. This will help you identify any potential problems before they become repairs. It's vital that you give your tenants at least 24 hours' notice before conducting viewings. It’s less about checking up on tenants and more about keeping your property in good condition.

Neglecting legal obligations
From the right safety checks to the correct level of insurance, there is a lot to remember. Having the right tenancy agreement is also vital, and you don’t want to skim over the details of this. It’s important to define the cost of rent and what it covers to notice periods. It’s also important to maintain records of rent payments, and while some things may not be a legal requirement, they can help your case if legal disputes arise.

Incorrect pricing
When deciding how much rent to charge, it’s important to strike the right balance. You don’t want to charge too much, which could lead to your property being vacant. On the other hand, you must factor in your maintenance costs and the area where your property is located.

Not using a letting agent
A letting agent can take care of as much or as little of all these processes for you, which helps protect your investment and ensures your rights as a landlord are protected. Managing your own buy-to-let property is a time-consuming business. But more than that, you don't want to get caught out or increase your costs due to poor management.

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Being a landlord today is a business and for any business to succeed, it takes investment and time, but it will need to make a profit in the short or long term. There are many ways to thrive as a landlord, from investing in the right location to adding value to your property. But like any business, reducing your costs will help you make more profit.

A good chat with your accountant
A great place to start if you do not already have one is to talk to your accountant. They will be able to outline the most tax-efficient ways to manage your portfolio, whether it consists of one property or a vastly increasing number of properties. They will be versed in the latest legislative changes that may affect your business.

Form a limited company
Your accountant may advise you to form a limited company. It's not a difficult or timely process, but if you do choose this route, you will need a good accountant. When purchasing your property, you will be able to do so through the company, and as a shareholder or director of the company, you have capped liability for debts, losses, or legal claims.

Claim your expenses
Reducing your tax bill as a landlord is made easier by setting up a limited company, which will allow you to offset costs against profits. The best way to record these is to keep a log of all your expenses and always keep receipts and invoices. Your accountant will be able to advise you on what expenses you can claim.

Letting agent fees are tax-deductible
Keeping track of the small costs is also important, as all these things can add up over the year. Expenses such as phone calls can sometimes get overlooked. It’s also worth noting that if you choose to manage your portfolio through a letting agent, you can deduct their fees from your taxable profit.

Tax bands
Making full use of various tax bands is also a good way to reduce your tax bill. For example, certain tax bands may help reduce Capital Gains Tax. If you sell your properties regularly and they do not gain in value, you will not pay Capital Gains Tax.

Tax relief rules
While landlords can no longer deduct mortgage expenses from their rental income, relief is paid as a tax credit as a percentage of mortgage interest payments. While this is not as generous as the pre-existing system, it is still a good way to reduce your tax bill.

Green home grants
While this is not tax relief, it’s another way to reduce your costs. This can provide funding for landlords who make their properties more energy efficient. So, if you are a landlord and are thinking about improving your property’s insulation or double glazing, you may be eligible for a grant.

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