Landlords: How To Deal With Tax Losses Without Rising Rates Too High
There are many issues for landlords to contend with and more regulatory changes coming into effect soon, it is essential that landlords remain in touch with breaking news from their sector. Outsiders may think that rising rental fees and rates is a positive thing for landlords, helping them to generate greater profits, but for many landlords, this isn’t the case. In fact, landlords are probably increasing rental rates because they are attempting to deal with tax losses. At Peter Anthony, we don’t believe this is a long-term strategy and we want to help landlords deal with tax losses without raising rates too high.
Statistics confirming that rental rates are rising can be found in the Private Rented Sector Report for March 2018, compiled by ARLA Propertymark. The report states that 23% of tenants have experienced an increase in their rent in this month. This increase is the biggest increase since September of last year when 27% of tenants had to contend with a rent increase. The report suggests that tax losses are the factor which has led landlords to increase rents.
The report is based on returns and information provided by 286 members of Propertymark, but these findings fit with what many people believe or expect from the market. While these rental fees don’t necessarily provide positive news for landlords, there is positivity to be found in an increase in demand for rental property.
There is an increase in demand for rental property
The same report states that on average, each member branch had 66 registered prospective tenants, which is an increase on the 61 registered prospective tenants for February of 2018. An increase of five people may not sound like a massive increase, but it is a positive step for an individual branch and when you consider this increase across the country, it indicates that there is positive movement with respect to demand in the lettings market.
Find ways to generate more income as a landlord
If landlords are looking for ways to minimise the budgetary impact of tax losses without asking tenants to pay more for rent, there are a number of options to consider, including:
- Renting out storage space that is linked or associated with the property
- Renting out parking space that is linked or associated with the property
- Providing tenants with utility services or communication products for an additional fee
- Offer additional services to tenants such as parcel collection or laundry cleaning
- Consider allowing tenants with pets to let
These are ways to generate additional income as a landlord without asking tenants to pay more in rent. This is a positive outcome for landlords and tenants, hopefully helping both to continue their partnership over a longer period. The risks associated with void periods are well known to landlords so being able to minimise these periods through keeping tenants happy is a positive aspect for landlords to consider.
At Peter Anthony, we know being a landlord isn’t easy and we are here to help. If you are a landlord in Stockport or Greater Manchester and you need a helping hand when it comes to providing the best possible service, get in touch and we will be more than happy to help.