Top Tips for Budgeting as a Landlord

As a landlord, you’ve got a lot of finances to juggle, so what’s the best way to handle it all?

When you become a landlord, it’s no longer just your own personal budget you have to worry about, you now have to balance the books for your business. And there’s quite a bit to keep on top of:

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  • Mortgage repayments. You need to make sure that your rent is coming in on time every month and is covering your mortgage repayments on the property
  • Compliance certificates. Legally, you need certain certification to make sure that your property is safe for renting – you’ll need to pay for a Gas Safety check every year, an EICR every 5 years and an EPC every 10 years
  • Deposits. Make sure that your tenant’s deposit is safely secured in one of three government approved deposit schemes or sign up for Mashroom’s 12 Week Deposit Guarantee
  • Insurance. You will need to keep on top of insurance for your property, while this isn’t a legal requirement, getting Rent Guarantee Insurance and Home Emergency Insurance ensures any problems you encounter won’t break the bank
  • Updates. Property is a long-term investment and you’ll need to update your properties several times over the years you own it, whether it’s general wear and tear or a complete facelift to appeal to more tenants

So with all that going on, how do you keep on top of it all?

How to budget as a landlord

First things first – never ever stick your head in the sand! Even if you are using an agent, you are liable for anything that goes wrong, so make sure you are aware of your responsibilities and check in with your agent. 

top tips for budgeting as a landlord

  1. Know the key dates. Make sure you know exactly when you are meant to receive your rent and when your mortgage payment is due. Have these in your calendar every month, so that you can check your rent has been received and is ready to pay the mortgage. This way, you are aware immediately if rent hasn’t been received and can act accordingly by speaking to your tenant and, if necessary, arrange to pay the mortgage from another account to avoid penalties
  2. Know your outgoings. Our free Expense Tracker helps with this, so use it to become familiar with your outgoings. Make sure that you know what you are paying per month, what you are paying per year and, most importantly, when these payments are due. Put them in your calendar with a reminder about a month before the due date! 
  3. Know your income. Make sure you know exactly what you receive each month from your rent, so that you can regularly check that this is enough to cover all of your outgoings
  4. Know your tax. Tax is a tricky one for everyone, so make sure you know as much as you can about it (our tax webinar series might help you with this!) and that you are saving money towards your tax bill on a monthly basis. Spreading the cost prevents a nasty and expensive surprise in the future!
  5. Know your rental income from your personal income. It’s a good idea to keep your rental income separate from your other income, as this allows you to keep on top of your rental income specifically and means you won’t inadvertently absorb it into your personal budget
  6. Know your savings. As well as having insurance, it’s a good idea to have savings too as you never know when you might need them! You can dip into your savings to deal with wear and tear on the property, as well as pay for regular updates to keep your property appealing to the market
  7. Know when to remortgage. Make sure you have a note in your calendar about when your current mortgage term ends, with a reminder about 6 months before that date, so you can arrange a remortgage and find the next right deal for you. Otherwise, you could find your mortgage repayments shooting up! Book a call with our remortgage specialists to find out more
  8. Know how to protect yourself. Investing in property takes work – you’ve worked and saved hard to do this, so now you have it, make sure you protect it. Always hope for the best and prepare for the worst and invest in insurance that protects your investment. Rent Guarantee Insurance protects your income against rent arrears and Home Emergency Insurance means you’ll be covered and can react quickly to emergencies

Why it’s important to track everything as a landlord

It’s important that you keep a paper trail when it comes to your property – you never know when you might have to produce your current and historic legal certification, for example. Tracking everything may sound onerous, but it will actually make your life easier in the long run.

  • Make time. Many landlords have property as a side investment, not their main job, so it can be hard to juggle everything alongside your life and day job, but you must make time! Be regular and consistent in how often you sit down to check in on things – make it a habit, so you don’t miss anything!
  • Use great systems. Make your life easier by using 21st century technology. Our free Document Storage Tool keeps all your legal certification in one place, including all your historical documents and lets you know when you are coming up to expiry on anything. Our Expense Tracker is also free and allows you to visualise your income and expenses, so you can adjust accordingly
  • Have everything you need to hand. Try to keep everything you need in one place, so when you sit down to do your regular check-in, you don’t waste time trying to find everything!

You’ve come a long way to become a landlord, so use the skills you used to get you here to keep on top of everything you need to.

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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, or by contacting the FCA on 0800 111 6768

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