How to maximise your rental yield
Demand for rental properties has never been higher. As house deposits continue to rise, increasing numbers of first time buyers, families and single professionals are signing tenancy agreements and moving into someone else's nest egg. This, naturally, is great news for those letting a property. However, there is no guarantee that just because the demand is there, a property will lease successfully.
Indeed, competition for good tenants is fierce. Experienced landlords will pull out all the stops in order to avoid any dreaded and costly void periods where a property is left unoccupied. However, many of these measures will be a mystery to those who are either new to the rental business or that have become an 'accidental landlord' as a result of not being able to sell their home.
With that in mind, here are several ways in which you can maximise your rental yield:
Location and target market
Anyone considering a buy-to-let property must research locations before putting pen to paper. Attention needs to be paid toward whether the property is situated in an area for which there is a high demand, i.e. in the city and not in the middle of nowhere. You also need to ensure there will be a constant pipeline of tenants, that's why it is crucial to consider targeting a particular market. Attract successive intakes of students through acquiring a property in a densely-populated university town, for instance. Or appeal to young professionals through buying a new apartment near the station. It might sound obvious, but being in the right place and attracting the right demographic will make all the difference to your rental yield.
Condition and decoration
A property which has been looked after, kept clean and in good order is what most people are looking for. One which is run down, in need of a repaint and smells of wet dog is not going to be easy to let. It's common sense, or so you'd think. However, it's amazing the number of properties a tenant will be shown which fall well short of 'decent condition'. It stands to reason, therefore, that they will jump at your newly decorated, renovated house. It might necessitate some outlay, but ensuring that your property is in good condition will guarantee greater interest in it.
Hands-on or off?
Landlords have two options pertaining to their involvement with a tenancy: they can either be 'hands-on' or devolve responsibility to a third party letting agent. Both are perfectly fine, but the choice needs to be made before the tenants move in. Letting a property necessitates maintaining a relationship with tenants: answering their queries, fixing any repairs, etc. Landlords who are difficult to contact or slow to react could not only prompt complaints, but could risk non-renewals and bad reviews. Consequently, an individual who knows they won't have the time to commit to being a full-time landlord must allow their property to be managed via an agent instead. That way, they are not shirking any of their responsibilities and the tenant has a dedicated point of contact, 24/7.
Demand for rental properties may well be high, but if your rent is too steep, it will be extremely hard to let. To determine a competitive rent, do some research around similar properties in the area or speak to your letting agent for an expert opinion. You don't want to price yourself out of the market nor offer rents which are too generous.
Your property is sparkling clean, your letting agent is prepped and ready to go but who's going to know that your home is available if you don't advertise it efficiently? To target 'the right sort' or tenant, you need to advertise in 'the right sort' of places. This may be via the agent's own website or a recognised property search facility - probably not in the newsagent's window. Make sure that you present an accurate picture of the property, with numerous, clear photographs and a thorough description. The more information you can provide, the better.
Nothing harms your rental yield more than tenants that don't pay their rent or cause damage, so make sure that you or your letting agent carries out comprehensive checks in advance. This is your property and your investment, thus you need to determine whether a tenant can actually pay the rent. Obtain employment references and testimonials from previous landlords at the very least. This is not an invasion of privacy, it's a protective measure.
Reduce change-over time
Have a strategy in place to reduce the amount of time it takes between exiting current tenants and installing new ones to minimise the number of void days. Perhaps keep the contact details of tenants that have previously shown an interest in the property but were pipped to the post. It helps no end to keep in regular contact with your letting agent, so that they can canvass some prospective tenants on your behalf.
While the above points may seem obvious, if you want to achieve maximum rental yield, you would be well advised to follow them.
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FROM THE BLOG
By ATIF JAVID
By ATIF JAVID
By ATIF JAVID
By ATIF JAVID