Property Profits Leaking? Here’s What’s Eating Your Margins
( 4-5 Min Read )
And How to Fix Them Before They Cost You Thousands.
The truth is, the most successful property investors don’t just find great deals — they run their property businesses like a tight ship. Because it’s not just the big mistakes that hurt your bottom line. It’s the small, silent leaks — the overlooked details, the forgotten bills, the missed opportunities — that quietly erode your profit margins over time.
Here are 8 of the most common profit drains in property investing — and how to fix them fast.
1 / Not Reviewing Expenses Regularly
Costs have a way of creeping in unnoticed.
Subscriptions, inflated service charges, supplier rate increases — they quietly pile up.
📌 Fix it:
✅ Review your expenses at least quarterly, ideally monthly
✅ Scrutinise every recurring cost
✅ Cancel anything you no longer need or can renegotiate
2 / Ignoring Utility Bills
High energy costs can kill your cash flow — especially if you run HMOs or serviced accommodation. Too many investors stick with one supplier or don’t monitor usage.
📌 Fix it:
✅ Switch tariffs regularly
✅ Install smart thermostats to control heating remotely
✅ Monitor energy usage and educate tenants on energy-saving practices
Even small improvements here can make a big difference to your bottom line.
3 / Running Without Systems (No Time = No Scale)
Still doing everything manually? That's a one-way ticket to burnout and missed opportunities. Without systems, your growth is capped.
📌 Fix it:
✅ Hire a VA (Virtual Assistant) to take repetitive admin off your plate
✅ Use tools like Searchland, Asana, or Trello to streamline tasks
✅ Automate what you can — from rent collection to viewing scheduling
Smart systems = more time to grow your business, less time firefighting.
4 / Overpaying Tax
If you’re not optimising for tax, you’re giving money away.
Most property companies don’t take full advantage of the available and legit reliefs and strategies.
📌 Fix it:
✅ Use trivial benefits (£50 x 6 per director annually)
✅ Maximise company pension contributions (up to £60k per year per director)
✅ Charge your company for home office use
✅ Lease or buy an electric vehicle through your company
✅ Optimise your salary/dividend split for tax
✅ Ensure your company pays for what it legally can (phones, expenses, etc.)
⚠️ Get a proactive accountant or tax advisor who knows property — not just a number-cruncher.
5 / No Shareholders’ Agreement
Got a JV partner? Life partner? A friend who holds shares in your company? If you don't have a shareholders’ agreement in place, you’re exposed.
You might trust them completely now, but life changes. Disputes, divorces, unexpected exits — without legal protection, it could cost you the whole business.
📌 Fix it:
✅ Draft a shareholders’ agreement
✅ Use different share classes where needed
✅ Get legal and specialist advice, even if it feels premature
This is one of those things you’ll wish you did — before you need it.
6 / Paying the Wrong VAT Rate on Works
Certain conversions (like turning a single dwelling into an HMO) qualify for reduced VAT rates — often 5% instead of 20%. Many investors overpay without realising it.
📌 Fix it:
✅ Confirm eligibility before starting works
✅ Ensure your contractor applies the correct VAT rate
✅ Speak to a VAT specialist if in doubt
This simple step could save you thousands on a project.
7 / Missing Out on Grants and Funding
If you're working on a listed building or within a conservation area, you could qualify for local heritage or council grants.
Most investors overlook this — and miss out on free money.
📌 Fix it:
✅ Check with your local authority before starting work
✅ Look for heritage funding, energy efficiency grants, or local improvement schemes
It’s worth the admin for the potential upside.
8 / Focusing on Growth, While Ignoring the Basics
Many investors stay focused on growth, deals, development — but neglect the fundamentals of running a business well.
It’s not just about what you buy or build — it’s about how you manage the business around it.
If you’re not careful, poor systems, hidden costs, tax inefficiencies, or legal blind spots can undo all your hard work.
Final Thoughts
Property mistakes don’t just cost money. They cost time, peace of mind, and long-term opportunity.
So ask yourself: Which of these 8 drains do you need to fix today?
To succeed in property, it's not just about good design or smart deals. It's about running your business like a well-oiled machine — where every pound is protected, every process is optimised, and every opportunity is taken.
Because true success in property isn’t just about bricks and mortar. It’s about how well you run your business behind the scenes.