All landlords should be looking to increase the income they recent from rental property, but it is important to be realistic when setting the monthly rental fee. Setting too high a fee might make the rental property unpalatable for many people, lowering demand, and increasing the likelihood of void periods.
Therefore, landlords need to consider extra income opportunities. Rather than charging a higher rental fee, landlords can provide additional services which generate additional income. This creates flexibility, and while not every tenant will need the services on offer, it is an effective way for landlords to generate extra income at this time.
The introduction of the Tenant Fees Act in 2019 changed how many landlords operate. There has been a strict limitation on what fees landlords can charge, and any landlord looking to generate extra income opportunities must be mindful of the Act.
The permitted fees a landlord can charge, as detailed in the Act, are:
· Tenancy deposit
· Holding deposit
· Payment in the event of a default
· Payment of Damages for Breach of an Agreement
· Payment on variation, assignment or novation of a tenancy
· Payment on termination of a tenancy
· Payment in respect of council tax
· Payment in respect of utilities etc
· Payment in respect of a television licence
· Payment in respect of communication services
Even in these areas, a landlord cannot charge a premium on top of the expected cost to generate income. If a landlord set up and managed the broadband connection for the rental property, they can only pass on the fee, and a reasonable charge for administration if applicable to the tenant.
A landlord would not be allowed to provide broadband connectivity or TV services to tenants, and charge them a price which pays for the service and generates a profit for the landlord.
While the Tenant Fees Act limits the opportunities for landlords to generate additional income, there are still options to consider.
In some areas, parking space is at a premium, and many people are willing to pay a significant fee for this income. If your tenant doesn’t utilise the parking space associated with the property, or there is additional space, this can be offered as a way of generating income.
Some tenants benefit from additional services. By offering a parcel collection service or providing household chore services such as ironing or washing, even on an irregular basis, can allow landlords to generate additional income.
While there has been some debate about this approach, some landlords have generated additional income by placing a premium on allowing pets to stay. By advertising a rental fee for a tenant without pets and then a higher rental fee for tenants with pets, a premium service is offered at a premium price.
With many tenants experiencing problems in finding suitable rental accommodation for them and their pets, this service is welcomed by many tenants.
We offer a range of letting services to landlords in Tooting, including tailored options which ensure you receive the best support at all times. If you would like to arrange an appointment to help you negotiate the local buy-to-let market, please contact Bluestone Properties today by calling us on 0208 355 3405 or emailing us at firstname.lastname@example.org.