Boost Your Finances in 2024: 6 Money Saving Tips for Landlords

Take charge of your 2024 landlord journey, improving your financial standing with six proven tips to save money.

Newcomers to property management often find themselves taken aback by unforeseen expenses. Instead of the dream scenario of collecting rent hassle-free, landlords might find themselves dealing with various financial demands each month.

Whether it’s dealing with maintenance and repairs or navigating through sudden void periods, there’s always a chance you might need to reach into your pockets. The good news is, every expense is an opportunity to be resourceful.

Drawing from OpenRent’s extensive experience in letting over 1,000,000 properties, we’ve gathered invaluable insights to guide landlords in making savvy financial decisions and optimising savings.

1. Use your expensable allowances
2. Order everything online
3. Take advantage of landlord association membership benefits
4. Remember to remortgage often
5. Don’t get locked into contracts with ongoing fees
6. Learn the difference between custodial and insured deposit schemes

1. Use your expensable allowances

Many landlords are often taken aback by the multitude of costs that can be deducted from their tax on rental income. The list of tax-deductible expenses is extensive, covering repairs, property maintenance, furnishings replacement, ground rent, and even building insurance.

Making sure you claim all eligible expenses can mean moving hundreds or even thousands of pounds from your taxable income, potentially saving you a lot of money and even pushing you into a lower tax bracket.

Don’t forget, landlords can also leverage the Rent a Room Scheme to pay no tax on rent from lodgers in their own home, up to £7,500 per year.

2. Order everything online

Much like groceries and clothing, the most cost-effective deals for landlord services are often found online. Whether it’s tenant referencing, safety certificates, or landlord insurance, online sellers tend to provide better deals compared to local letting agents or firms.

In instances like gas checks or referencing, where the services offered are virtually identical, paying nearly double for the same report becomes unnecessary.

Online vendors have much higher volumes, which allows them to negotiate the best rates with referencing companies, insurers and even networks of tradespeople like gas engineers and electricians.

Benefiting from higher volumes, online letting agents like OpenRent, can negotiate more competitive rates with referencing companies, insurers, and networks of tradespeople such as gas engineers and electricians.

The message is clear: for the most budget-friendly landlord services, your best bet is to explore online options first.

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You might also be interested in…

• A Guide to Tax Deductible Costs for Your Landlord Tax Return
• When Will Section 21 Evictions Be Scrapped?
• How to Serve a Section 21 Notice to Tenants
• What’s a Good ROI for a Buy to Let Property in the UK?
• Tenant Fees Act 2019: A Guide for Landlords

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3. Take advantage of landlord association membership benefits 

Landlord associations extend various advantages to their members, including practical cost savings. For instance, if your property falls under the local council’s licensing scheme, acquiring a licence is necessary.

Frequently, councils offer discounts to landlord association members, assuming these landlords are more likely to adhere to regulations.

A standard 20% discount on an £800 licence fee translates to a substantial £160 saving, surpassing the cost of most landlord association subscriptions.

4. Remember to remortgage often

As the mortgage market settles, looking ahead to 2024, there’s a promising trend of fixed rates continuing to drop.

If inflation keeps falling, there’s hope that the Bank of England might lower the Bank Rate, which has stood at 5.25% since August.

Although this adjustment isn’t expected until spring, it could mark the beginning of a gradual decline that might extend into 2025.

If you bought your property with a buy-to-let mortgage, you might be in for a surprise at how much you might be able to save through regular remortgaging. As those introductory rates come to an end, lenders are assuming you’re too busy to bother shopping around.

It’s really important to make time this year to check if there’s a better deal out there, as it could mean saving thousands down the line.

5. Don’t get locked into contracts with ongoing fees

Working with a traditional letting agency often means dealing with an array of accumulating costs in your contract: charges for tenant replacements, fees for discontinuing their tenant-finding service, costs for tenant evictions, and charges for renewing your tenancy with existing tenants – adding to the 10-15% monthly fee they already take!

You can increase your savings by exploring alternatives to traditional letting agents, such as using platforms like OpenRent.

This approach helps you avoid potential hidden fees often associated with traditional letting agents’ contracts, offering a more transparent and cost-effective solution. While fully managed services may have their merits, OpenRent provides a user-friendly and value-driven option for landlords to consider.

6. Learn the difference between custodial and insured deposit schemes

The potential for saving money when choosing between custodial and insured deposit schemes depends on various factors.

Opting for a custodial scheme may bring immediate savings, as landlords typically don’t incur fees for this service, ensuring simplicity and security in deposit management.

On the other hand, with an insured scheme, landlords retain control but often face a fee (around £30), which could be avoided to achieve savings.

When deciding, landlords should consider factors like risk tolerance, control preferences, and prevailing economic conditions, making it essential for you to weigh the benefits against the associated fees and align your choice with your financial goals.

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