Renovations that did not add value, selling up at the wrong time and not asking for a bigger deposit are among the costly mistakes that landlords have made, a survey has found.
Nearly a fifth (19%) of buy-to-let landlords regretted how much they had spent on renovations that did not increase the value of the property or increase their rental returns, according to a survey commissioned by specialist property lender Together.
One in six (16%) said they had either sold a property too soon or held on to one for too long – and so had missed out on better opportunities.
The Censuswide survey of 1,000 landlords across the UK, to ask about their most costly mistakes, found 18% had underestimated the level of wear and tear their tenants would have on their property and 16% had not grasped how much maintenance and repair costs would amount to.
A further 11% regretted not asking for a bigger deposit to cover damage to their property, while 9% said allowing pets had been a costly mistake.
One in six (16%) had taken on too many properties and the same proportion had not accounted for the rising cost of professional services, such as legal fees and managing the property.
Some 15% of landlords had made costly errors by purchasing properties in the wrong location, with some saying they had focused on areas providing low returns, according to the survey carried out in March.
Meanwhile 15% regretted not ensuring they had a financial safety net or appropriate insurance ready which could have helped them cover unexpected costs, while 13% said they had taken on too much debt.
The survey also found 14% highlighted not investing in energy efficiency as a costly mistake, with the same proportion also saying they had not anticipated regulatory and tax changes.
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Ryan Etchells, chief commercial officer at Together, said: “Landlords need to do their research on locations, property types and condition and the rental market as well as having adequate savings to cover wear and tear and to deal with any issues such as unexpected maintenance costs or void periods.
“A healthy rental sector is crucial to a well-functioning housing market and there are numerous opportunities for property professionals to achieve good yields while providing the rental homes which the UK needs.”
