Transcript The business plan

National Landlords Association
www.landlords.org.uk
www.landlords.org.uk
Professional Practice For Profit
 The campaign aims to:
- Highlight the importance of operating in a business like manner,
regardless of your portfolio size
- Help you maximise your profit margins
 March 2014 – July 2014
 Today we will be looking at ideas for
maximising future returns
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Maximising future returns
 Worryingly only 48% of landlords consider
their property lets ‘a business’.
 Providing a home in return for rent is a business
exchange.
- Landlords should consider their lettings as a business to turn profits
 Good, well run businesses should make profits
- Professionally-run businesses make more profit
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The business plan
 Where do you want your business
to be in five years’ time?
 Create a business plan
-
Consider the next 1, 3, 5 years
Consider each property separately
Consider market movements
Consider expansion/reduction plans
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Expect the unexpected
 Be prepared for those worst case scenarios
- rent arrears
- expensive repairs
- voids
 Build a buffer into your budget
- budget to receive 10 months’ rent in every 12 month period
 Protect yourself
- purchase insurance policies to protect your income
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Insurance
 NLA Rent Protect
- protects you if your tenant fails to pay the rent
- covers you for up to £2500 per month in unpaid
rental income and it covers legal costs to help you
in the recovery of unpaid rent
- £10 discount for NLA Full Members
 NLA Property insurance
- As a landlord it is vital that you take out
residential landlord property insurance as normal
home insurance policies do not cover essentials
such as public liability and alternative
accommodation
- 15% discount for NLA Full Members
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Voids
 Even the most loyal tenants may want to move on
at some point
 Avoid the surprise factor
- discuss future plans
- offer resolutions to problems/faults
 Remember the rule: budget to receive 10 months’
rent in every 12 month period
- this will protect you from unexpected costs
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Rent arrears
 Can happen to any tenant, even those who have
been thoroughly referenced
- anyone can lose their job or experience relationship breakdown
 Maintain an open dialogue
- encourage tenants to discuss rent problems and create short term
solutions
 Remember the rule: budget to receive 10
months’ rent in every 12 month period
- this will allow you to continue to make mortgage payments if
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your tenant fails to pay
Keep on top of your rent payments
 NLA Rent Manager
- NLA Rent Manager is an online landlord software solution that
allows you to better manage every aspect of your rents
- Designed by landlords, for landlords, NLA Rent Manager will
make the task of rent management much easier, saving you both
time and money in managing your rents, no matter the size of your
portfolio
- Don’t let rent arrears, keep on top of missed payments with NLA
Rent Manager, FREE to all NLA Full Members
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Budget management
 Adapt your budget according to changes and
unexpected costs
– review your annual budget every month to check you’re on course
 Build in rent increases
 Build in planned expenses
- Scheduled maintenance
- Gas Safety checks
- redecoration requirements
- licensing costs
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Tax planning
 All rental income must be declared – even if
you’re making a loss
 Schedule tax returns
 Talk to an accountant if you’re unsure
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Seek tax advice
 Stern and Company
- NLA Recognised Supplier
- Expert tax advice and record
- fixed monthly fee.
 NLA Tax Investigation Insurance
- HMRC routinely check a proportion of tax
returns
- They may also decide to conduct an extensive
examination
- All these enquiries take time and money to sort
out.
- NLA Tax Investigation Insurance is free for NLA
Full Members
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Calculating yields
 There are a number of yield calculations, each
useful in different ways
 Gross yield
 Net yield
 Yield on actual investment
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Calculating yields
http://www.landlords.org.uk/yieldcalculators
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Tips and ideas
 How would you manage your business plan?
 What would you advise?
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And finally…
 For more information
- On points covered in this presentation
- Business advice
- Help with professional development
Visit www.landlords.org.uk/professionalpractice
 The NLA Telephone Advice Line can help with
specific questions on practical issues
- 0207 840 8939 (9am – 5pm, Monday – Friday)
 To join or upgrade your membership
- Speak to your NLA Local Representative
- Contact the NLA Membership Team on 0207 840 8937
- Visit www.landlords.org.uk/membership
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