Recent research has shown that as many as a third of landlords are falling into a borrowing trap.
Without realising, or remembering, they are not remortgaging before their existing product expires and so ending up on the Standard Variable Rate (SVR) from their lender. This costs them on average £371, which means quite a dent in some yields.
Calculated by tracking how many people ended up on SVR in 2017 and how many days they were on that rate for, researchers found the average 42 days on SVR costs those who renewed too late as much as £61.83 on average.
Linda Wale, Independent Mortgage Advisor, reminded us that there are other traps landlords fall into with regards to their finances, like sitting on old loans. With better financial management, things like unchecked insurances and old mortgages will be picked up on and prevent jeopardising the viability of their investments.
Linda estimated that as many as one in three landlords are overpaying on their mortgage. Because of the many changes in the last couple of years, being a landlord has become more complicated and many people do not realise the impact these things are having on the bottom line. “Cost reduction can be done at most stages and level of investment but landlords need to be made aware of these figures so they can ensure they’re not at risk themselves. Costs are rising across the UK so profitability will be affected but this can be mitigated with the correct advice and management.”
Ensure you're maximising the return on your investments further with regular rental amount assessments with up to date comparables and ensure you're producing or receiving full colour, in depth inspection reports so any problems can be dealt with swiftly before they get worse.
For a quick chat over a coffee and some expert advice, please do get in touch.