The UK is experiencing unprecedented economic difficulty at the moment, as the rate of inflation continues to threaten to rise above 10% in the coming winter. The rising energy prices and material costs fuelling this rise have proven untenable for millions of households, and threaten the bottom line of professional landlords across the country.
Thankfully, there are some simple approaches you can take to shore up your income during the cost-of-living crisis. Here are some of the best ways to save and invest money for the future.
Remortgage Your Properties
If your various rental properties were purchased using buy-to-let mortgages rather than purchased outright, you will be rightfully concerned about the potential burden of rising interest rates on your repayment obligations. With the Bank of England set to announce further increases to the national rate of interest, new variable mortgage agreements are likely to see significantly higher interest rates attached.
As such, now is likely the best time for you to consider remortgaging your buy-to-let properties. In remortgaging, you can seek reasonable interest rates and fix them for a set period – weathering you from the short-term shock introduced by rising interest rates.
Take Out Insurance Policies
If you do not already have insurance policies out on your existing portfolio, now is a good time to take out landlord insurance. Insurance can often seem an unnecessary expense, and especially so when the temptation is to minimise cash flow – but insurance could well be the difference between a healthy portfolio and remedial financial action.
In a time of economic difficulty for everyone, unexpected repairs and emergency payments can decimate your cash standing. Insurance is an indispensable buffer for these unexpected costs and can ensure you aren’t required to take drastic measures elsewhere to afford work.
Diversify Your Practice
The vast majority of your income will likely come from long-term tenants, with whom you may have a rolling contract. Strictly speaking, maintaining a positive long-term relationship with tenants is the best way to secure your income for the coming months and years – but tenants leaving is an unavoidable part of the letting process.
Rather than leaving your rental properties empty during void periods between tenants, you can make use of short-term letting options to diversify your income stream and fill the gaps between paying residents. Online holiday letting platforms are more popular than ever amongst consumers, and your rental properties could be earning you a premium from tourists and travellers on these platforms.
Buy More Properties
While increased expenditure on the property may seem counterintuitive at a time when money is tight, the property is arguably the safest market in which to invest during times of potential recession. Rental properties will be in higher demand than ever, as first-time buyers remain priced out of the market. Meanwhile, properties themselves remain in high demand, keeping values high and protecting your investment.