Most landlords strive to achieve a high rental yield. To maintain a stable financial situation, an adequate rental yield is necessary to compensate for mortgage payments, repairs, and maintenance. Regardless of the location or price of the property, there are ways to maximize profits while reducing expenses.
What is Rental Yield?
Rental yield is essentially the potential returns you expect on property investment through rent. From making simple upgrades to targeting specific tenants, here’s some straightforward advice on ways to increase your rental yield.
Evaluate your outgoings
When considering your rental yields as a landlord, it is imperative to consider your fixed costs. Maintain a close eye on your outgoings and set reminders to consider alternatives when the time arises. Mortgage payments, insurance premiums, or leasehold payments may be included in the cost.
Refurbishment
You should consider whether any increase in rent is justified by the condition of your property. It is also possible to establish long-term tenancies by refurbishing and redecorating your property, which demonstrates that you care about your tenants and encourages them to treat the property with a greater degree of respect. Providing appliances, repainting, replacing the carpets, adding a work desk, and updating the bathroom and kitchen could make tenants feel more comfortable in paying a higher rent.
Convert, extend or add
The possibility of adding more rooms or increasing the number of bedrooms may not be available to all landlords, but if there is space, you may wish to explore this option. For instance, some landlords may consider converting their garage or loft into an extra bedroom to increase their rental income. Rules and regulations including potential planning permission may need to be adhered to before conversions, extensions or additions can be made.
Storage
Adding space to your property is another way to add value and make it more appealing to renters. Simple storage solutions like inbuilt cupboards can do the trick. Especially if your target market includes growing families.
Be flexible
The ability to be flexible is highly valued by prospective tenants. Allowing minor aesthetic changes to let pets in can grow your yield over time.
Sustainability
Considering the increasing popularity of sustainable living, improving insulation, and implementing green changes to your rental property may attract tenants in greater numbers. It is not only cost-effective for you to improve the energy efficiency rating of your property, but it is also a deciding factor for potential tenants. Making a property more eco-friendly can differentiate you from your competitors and justify a higher rental charge.
Consider Students
If your property is in an area close to one or more universities, you can take advantage of the robust and consistent demand for accommodation in the student market. The primary benefits of renting to students are twofold. Primarily, a group of students will usually require accommodation for a minimum of 12 months (corresponding roughly to the academic year) and may stay even longer if they are only in their second year of study and happy with the property you provide.
This reduces your risk of lengthy void periods, leading to lower standing costs that impact your annual yield. Then, students tend to rent in groups of three, four, or five. If you have a multi-bedroom property, renting to multiple sharers will increase your monthly income. Though renting to sharers might mean a slightly greater risk of wear and tear or accidental damage, the higher monthly rent will still most likely leave you with a stronger overall net yield.
Hiring a letting agent/ property management company can help you get the most out of your property portfolio. If you have the right tenant in your property, your rental yields are more likely to go up and if they take care of the house, your costs may go down. Pebble Mountain Properties provide comprehensive property reports and essential services such as inventory management to help landlords protect their investment and increase yields.
For more information on how Pebble Mountain Properties could help, please contact us for more guidance and assistance on any of the above.
info@pebblemountainproperties.co.uk
+44(0)1224 061159