Tax increases have led to some landlords throwing in the towel. If you’re thinking of doing the same, read on.

The introduction of a 3% surcharge on buy-to-let properties, paired with a reduction in claimable tax relief, has made it a difficult year for landlords.

But rental properties are still increasing in demand, and due to an exodus of many private landlords, there’s a noticeable shortage. Clearly the opportunity to gain a good return on investment is there, even if it does require a bit of elbow grease.

Here are five ways to protect your financial interests as a landlord:

1. Sell – Not your entire portfolio, but look at those properties which have been difficult to rent out in the past, perhaps because they’re in an area with plenty of options. Weigh up which properties are going to benefit you more through a sale rather than renting.
2. Extend – If rental properties are short for one or two occupants, those with bigger families have an even harder time trying to find somewhere to call home. Do any of your properties have scope for an extension? Or could you convert the attic or basement?
3. Split – If you have a property in an area that’s more in demand for single professionals rather than families, it could be worth letting a larger property as an HMO. This might mean putting in en-suite bathrooms and increasing kitchen storage space to appease prospective tenants. In the same vein, if you have a sizeable one-bedroom property, look at turning it into two. Not only will you get more interest from friends looking to share, you’ll also appeal to those who are searching for a guest bedroom or study.
4. Evolve – If you have a number of properties, it could be worth setting up as a Limited Company, as the tax changes affecting landlords won’t then apply.
5. Adapt – Could you save money by managing the property/properties yourself? Or manage more properties on behalf of other landlords for a fee? Your sideline money-maker could become a full-time job if you wanted it to.

Whatever route you decide to take to safeguard your property rental income stream, don’t forget that one of the most important areas you should consider is insurance. Property Owners’ insurance can offer vital financial protection in the event of property damage, tenant claims, and missed rental payments.

Speak to the team at Lockyers on 01924 278222 to find out more about residential landlords insurance.