… Even if your expenditure changes
As a Landlord I know that the monthly rental profit is at the forefront of your mind. This is how you make a day-to-day living from your properties. However, do you stress that this isn’t enough? In this article I’m going to give you a very simple tip of how to increase your monthly rental profit, without the stress of increasing the rent, even if your expenses fluctuate.
Your Monthly Rental Profit
Does it frustrate you that each month you don’t get any take home from your rental income because you are worried that there won’t be enough left in the pot? Do you find it difficult to know how much your expenditure will be? Do you find yourself feeling out of control with your accounting? Do you now feel like owning property is a waste of time? Or that you will never make a living from your rental income?
It’s a problem that is real to many Landlords. The feeling that they will never take home any profit from their properties each month. With fees and service charges getting higher and never knowing when a new maintenance problem is coming round the corner, it can completely wipe out any profit you could hope to make.
However, I have put together a system to handle this that works. And, it’s simple:
Landlords, you have to budget for your income.
Seriously, if you want to know how much you are taking home each month you need to put it in your yearly budget.
Your Yearly Budget
Once a year (or right now if you haven’t yet done this) you need to pull out a spreadsheet and examine exactly what is going on right now.
The formula is this:
Monthly Rental Income
LESS
Mortgage (£x)
Service Charge (£x) Or building maintenance if you are Freeholder (Estimate at 10% of the rent)
Maintenance (Estimate at 10% of the rent)
Insurance
Management (Estimate at 10% of the rent unless you have exact figure)
Contingency (Estimate at 5% of the rent)
EQUALS
Your profit
(obviously you will be taxed on this so ask your accountant for advice)
How to Maintain the Profit
Now you know how much you are going to be making. Maintain this, by making sure that where you don’t spend your contingency or maintenance fund each month it stays in the pot for when it’s necessary and only take out the profit you know you are guaranteed.
Doing this PUTS YOU IN CONTROL. You are in the driving seat and that’s awesome.
Did the formula come back in negative £’s? Or have you done this and still can’t see how you would be able to make a profit?
Book a call with me HERE, let’s discuss. I want you to be a successful Landlord, so let me help you make get you to that profit you dream of.
Has this blog post been helpful? Let me know in the comments section below. I would love to hear from you!
NC
