A Landlord’s Guide to Saving – The other week it was reported that landlords need to make sure they have a contingency plan when it comes to their business, especially as the rental market is constantly changing. Even though it’s relatively easy to make a profit now, there is always the chance that something could go wrong, which is why it is so important to have some extra cash that can help. So here is our guide to saving and how it can be done without having too much of an effect on your income:
Stick to your Budget
It’s often difficult to save if you don’t stick to your budget every month, which means not only making sure you have enough to cover your outgoings as a landlord but also that you don’t overspend your income. Most landlords know how much they need to pay each month in order to cover the cost of their business, however many don’t think about how their personal spending can also affect their business. One way to tackle this is to check your personal bank statements for the past few months and see if you are overspending on anything, such as g takeaways or shopping trips. Putting into practice you budgeting skills for all your finances will really make a huge difference and can help you save more than you thought!
One of the easiest ways to save money is to create a direct debit from your account that will occur each month and go straight into your savings. It may be a good idea to create a savings account at a building society or some other bank that is not directly linked to your business, and make sure you can’t access it too easily! Most people these days use internet banking to manage their finances; however this means that you can access your money and move it around almost instantly. By having to physically go to the bank to withdraw money you won’t be tempted to take money out here and there and it will also prevent you from making any rash decisions!
The Rainy Day
No matter how much you plan and budget that rainy day will come for us all, so not only do you need to have savings prepared but also a general back up plan. Do you know what you would do if your tenant disappears owing a large amount in rent? Or how you would cope if one of your properties suffers extensive damages from a fire or flood? Naturally, your landlord insurance will help cover the costs, but you should also think about all the paperwork involved and how much time it will take out of your daily life. Planning for the worst is a great way to ensure that you can handle any situation when it comes around, and it means you won’t lose sleep worrying!