Coventry landlords must keep rents competitive to be ‘bulletproof’, local property expert warns

A local property expert has shared his top tips on the steps he says landlords in Coventry can take to be ‘bulletproof’ – and advises them to keep their rents competitive and avoid big spikes . Jag Chaggar says his perspective on real estate investing is that over time, “you can’t lose.”

Property prices are always a talking point, and while they can fluctuate, he says that even after a downturn, they eventually recover. Jag, who is the director of Tutis Estate in Holbrooks, says the key to ensuring success as a landlord is not being forced out of the market when prices are low.

Jag advises them to prepare in advance. And he says there are four steps local landlords can take to “protect” their property portfolio and ensure it remains resilient in any crisis.

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Take a look at his guidance below.

1) Allow your loan-to-value ratio to fall

Jag says the main risk during a market crash is the inability to keep up mortgage payments, which could force a sale at rock bottom prices. If your loan-to-value ratio is 75% and prices are falling, you may need to refinance to 90% of the property’s value, which may be impossible and will leave you stuck with an expensive standard variable rate.

He says, “Failure to make these payments results in the loss of the property. To protect against this, avoid the temptation to borrow more as the value of your property increases.

“Allow your loan-to-value ratio to decrease naturally over time. By reducing it to 60% by the time a crash occurs, you will likely secure favorable loan terms and maintain profitability.”

2) Maintaining competitive rents

A solid rental income buffer is the best defense against an accident, Jag advises landlords. His advice is that gradually increasing rents is key to achieving this: “Many investors, faced with rising costs in 2022, have found that it is often too late to adjust rents significantly.

“Tenants may be on a fixed term or may not be able to afford a substantial increase. By bringing rents in line with market norms through small annual increases, you can avoid this predicament.”

3) Build a cash reserve

Most of the problems boil down to cash flow issues, according to Jag. While he says the market value will eventually recover, you need cash to support the interim period. This is where an emergency fund is vital – enough cash to cover a reasonable, worst-case scenario.

Jag says, “Having more money than the minimum required may seem inefficient, but it significantly mitigates risk, allowing you to pay down debt if needed.”

4) Capitalize on booms

A property crash usually follows a boom, says Jag. In his opinion, the mistake is to get too enthusiastic and overpay during this boom. Instead, use this period to sell any underperforming properties.

He advises, “The proceeds can boost your emergency fund, reduce debt or be held in reserve, ready to take advantage of opportunities when the market recovers. By sticking to these strategies, you can strengthen your property portfolio against market volatility and insure yourself for the long term. success.”

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