As the tax year has come to a close, I have just finished sending out annual account statements to all of my Chichester landlords who employ me on a full management basis.
It’s not something I publicise I do (free of charge) as part of my service, but I think it will make my landlords (or their accountants!) lives easier come self-assessment time.
The statement breaks down the total rent they have received in the tax year for each property, along with any deductions that were made (my management fees and any property maintenance costs). It’s similar to what I send each month when the rent comes in, but this time for the whole tax year.
Not only is this a nice overview for the landlord and again demonstrates my complete transparency in regards to my fees, but it also ensures all costs are accounted for so that they can get maximum tax relief. This is increasingly important at a time when mortgage interest relief is reducing, as I discussed a couple of weeks ago.
It also gives me some great figures to analyse, which I wanted to share with you.
The average rent my landlords are achieving is £1,150pcm, which is 18% higher than the current average Chichester rent of £972pcm. Plus they have received 100% of the rent due to them i.e. there were no non-paying tenants all year – phew!
What’s more is that my unique fixed-fee structure is proving to be excellent value for my landlords; demonstrated by my average landlord being charged 7.8% in total for a full tenant find and ongoing management service. One landlord is paying just 4.7% as their property achieves a particularly high rent, meaning my fixed fee proves to be even cheaper for them.
What was also interesting to see is that my landlords are spending just £378.25 a year on average on property maintenance, which is just 3.1% of the total rent they receive.
Common lettings advice is to set aside 10% of your annual rent to account for property maintenance, but my landlords are doing far better than this. I suspect this is partly because I focus on more modern properties, which should inherently have fewer issues, and because I tend to endorse the attitude of ‘prevention rather than cure’ – spending a little in the short-term to save a lot in the long-term.
I hope it’s also in part down to the carefully selected maintenance contractors I use, who offer good value for money, plus the fact I don’t add a mark-up to maintenance costs or charge additional commission. I also often check issues for myself to see if they can be rectified by me, free of charge, before getting in the paid help.