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  • 18 Essential Tips for reducing your portfolio operating costs!

18 Essential Tips for reducing your portfolio operating costs!

This is an excerpt from the published book: : How to Beat the Credit Crunch written by Toby Hone. Full time UK Landlord and Property Investor and Author as featured and recommended in ‘’The Telegraph’’ and B2L Magazine (Mortgage Express publication)

18 Essential Tips for Reducing Costs:

• Determine the best means of marketing each of your properties. Some properties will need to be advertised in your local newspaper, classifieds or on the Internet. Try different methods and when you find one that works stick to it.

• Make sure you target the right tenants with accurate descriptions of the property and of the type of tenant you are looking for.

• If tenants call, develop a screening process. Ask them what they are looking for, do they have a partner and/or children, how much rent can they afford, what areas are they looking for, do they have employment / previous landlord references, any pets, do they smoke, do they need parking, do they need a garden, do they have a deposit, can they pay one month rent upfront etc. It helps to get answers to all these questions upfront, otherwise you may waste time and money by finding out, for instance, they have two male rottweilers the day before they move into your newly carpeted property.

• Explain that you charge a fee to cover tenant credit checks, inventory checks and the tenancy agreement, and that you require a guarantor (where necessary), along with proof of identification.

• If you don’t have what they’re looking for, don’t say that – rather tell them you have properties becoming available soon and take their details. It’s also possible to make a small commission by referring these tenants on to other landlords you may know.

• Try and get all your potential tenants to view on the same day, with 10 minute intervals between tenants. Not only does this save you time, but it also gives the impression the property is in demand and tenants will often decide on the spot.

• Always make sure you carry out a credit check on the tenant – there are various services available online at reasonable fees and this will certainly be worthwhile in ensuring quality tenants are placed.

• If the tenant is interested in taking your property, always ask for a non-refundable holding deposit. Not only does this ensure the tenant commits to the tenancy (there is nothing more frustrating than someone cancelling a tenancy a day before) but also compensates you for your time.

• When meeting the tenant to hand over keys, ensure you view documents proving the identity of the tenant and guarantor and get them to sign the inventory and tenancy agreements.

• A really useful tip is to identify tenants that may wish to swap between properties. I have on numerous occasions moved tenants between properties for a range of reasons: they may be expecting a baby so need an extra room, they may need to be closer to town or they may want to save some rent and move to a smaller place.

• Many landlords forget to take meter readings for gas and electricity, either when they purchase a new property or when the tenant moves in or out. This is vital to ensure that you are not charged any portion of usage that is not yours. Service providers (including water) will always try and bill you for services you have not used and the most common way they do this is by providing estimated readings.

I once had a gas bill for £85 even though the property was empty and the boiler and stove were off. The property had been empty when I purchased it, and 1 week later tenants moved in. Fortunately I had photographic evidence of the meter reading and was able to prove I was not liable for the bill. These costs end up being substantial over the course of a year, especially where large portfolios are involved. It is also useful to have all utility supplier contact details to give to all new tenants to speed up their connection where key and card meters are used.

• Ensure you inform the following organisations when new tenants move in and/or out: 1) the local council (for council tax) 2) water 3) gas and 4) electricity companies. It’s worth taking note that some (not all) councils either charge zero or 50% council tax on properties that are currently empty, provided they are actively being marketed, so it is worth telling the council if you get even a week’s void. Also, some councils will charge council tax on void properties if they are furnished or partly furnished.

• If a property is empty make sure you inform the water supplier as if it is on a service charge they may end up billing you during any void periods.

• If a property requires repairs or maintenance, ensure you get three different tradesmen to quote. Being lazy with obtaining quotes will normally cost you more than it should! Once you have found a reliable and reasonably priced tradesman you can keep using them.

• In instances where repairs may be very expensive to carry out, but the repair will not impact the living standards of the tenants, it may be more economical to offer the tenant a reduction in rent, rather than carrying out the repair. Although this is not the best long-term solution, it may be beneficial in the short term, especially where the repair may be better to carry out when the property is vacated.

• If a property is left in a poor state when vacated, it is sometimes easier to offer the new tenant (assuming they don’t mind) a small cash incentive to accept the property as is, and do the cleaning themselves. This however, can cause problems when referring to the inventory and the repayment of the deposit at the end of the tenancy.

• If you have carried out renovation work on a property, if there are any problems which arise, ensure you get the same tradesmen to carry out the repair. This way you won’t pay for unnecessary costs by getting new tradesmen in.

• When a tradesmen carries out a repair, always follow up the job by either contacting the tenant or viewing the work yourself. This will not only help clarify whether the tenant is happy with the repair, but will show the tradesman that you expect a certain quality of work, and that they can’t expect to pull a fast one on you!

I recently had a door lock fixed where the locksmith had charged me for 2-3 hours work. Before I paid, I checked with the tenant that the door was working and also asked how long the locksmith was there. The tenant mentioned he had only been there for 30 minutes! If I had not checked I would have paid for work not done – needless to say I not only got a reduction in my bill, but he offered some additional services for free for making the “invoicing mistake’’.

This article was written by Toby Hone, a full time UK based property investor and landlords and author of the published paperback book: How to Beat the Credit Crunch. The book is aimed at providing landlords of all experience with essential and practical advice on how to survive the credit crunch and looks at the 5 key areas that landlords need to target!

Other titles available include:
- How to Make Money from Property During the Credit Crunch,
- How to TRIPLE Your Rent Through Serviced Accommodation,
- Landlord Guide 2015 – Are you ignoring the biggest financial opportunity of your life? (which outlines how I saved over £100,000 in the last 5 months on my mortgages)