Are you a landlord? These are the costly mistakes you could be making
Landlords are counting the cost of common and costly mistakes, from ill-judged renovations to mis-timed sales, a new survey reveals.
A significant number of buy-to-let investors are regretting decisions that have impacted their profits, according to research commissioned by specialist property lender Together.
Nearly one-fifth (19 per cent) of landlords surveyed admitted overspending on renovations that failed to boost property values or rental income.
A further 16 per cent lamented selling properties prematurely or holding onto them for too long, missing out on potentially more lucrative opportunities.
The survey, conducted by Censuswide, polled 1,000 landlords across the UK, exploring their most expensive errors.
A recurring theme was the underestimation of tenant impact, with 18 per cent surprised by the level of wear and tear inflicted on their properties. This oversight often led to unexpected repair and maintenance costs, catching many landlords off guard.
An additional 16 per cent admitted to miscalculating these ongoing expenses, further impacting their bottom line.
A further 11 per cent regretted not asking for a bigger deposit to cover damage to their property, while 9 per cent said allowing pets had been a costly mistake.
One in six (16 per cent) had taken on too many properties and the same proportion had not accounted for the rising cost of professional services, such as legal fees and managing the property.
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Some 15 per cent of landlords had made costly errors by purchasing properties in the wrong location, with some saying they had focused on areas providing low returns, according to the survey carried out in March.
Meanwhile, 15 per cent regretted not ensuring they had a financial safety net or appropriate insurance ready which could have helped them cover unexpected costs, while 13 per cent said they had taken on too much debt.
The survey also found 14 per cent highlighted not investing in energy efficiency as a costly mistake, with the same proportion also saying they had not anticipated regulatory and tax changes.
Ryan Etchells, chief commercial officer at Together, said: “Landlords need to do their research on locations, property types and condition and the rental market as well as having adequate savings to cover wear and tear and to deal with any issues such as unexpected maintenance costs or void periods.
“A healthy rental sector is crucial to a well-functioning housing market and there are numerous opportunities for property professionals to achieve good yields while providing the rental homes which the UK needs.”
