There are several factors that contribute towards how much a tenant is willing to pay for their rent. Some of these factors are external to the property, which a landlord cannot do much about. Examples of these are:
- Transport Links
- Availability of other rental properties
Whilst these factors are important to consider when first buying a property, landlords can still take matters into their own hands and increase the rental yield of their properties. Here are a few ideas on how to do so:
Rent your property furnished
Fully furbished properties attract higher rents, as ”renting a two bedroom furnished flat in the UK can cost up to £129 or 21% more than an unfurnished property” [PropertyWire]. By ensuring the let includes the basic essential appliances, it immediately increases amount a prospective tenant would be willing to pay. Furthermore, the inclusion luxury items in the property will have the same positive effects, for example an expensive coffee machine. These little extras can really make a place stand out and make your portfolio that bit more desirable on the market.
Add another bedroom
By adding another bedroom, you can instantly double your rental income from a 1-bedroom to a 2-bedroom property. This may take considerable planning and investment, however maximising spaces such as attics and garages is a great place to start. The average cost of a loft conversion is between £15000-£40000 [NAEA], with huge long term potential to bringing in extra rental income. You can also create partitions to increase the number of bedrooms at a more affordable cost if you would rather divide current space rather than extending. An industry average of £800 for the stud wall installation is very affordable.
By redecorating the interior of a property, it is more likely a prospective tenant can envisage themselves living there, driving up the demand for the property and in turn allows one to increase the desired rental amount.It’s important to note that sprucing up the inside of a property doesn’t need to be expensive with the correct attitude; repairing rather than replacing can be inexpensive yet effective. It’s recommended to paint walls every 5 years to keep your property looking good and fresh in the market.
The inclusion of bills with the monthly rent is one way to increase the rental yield. However, this decision must be thought about and varies from property to property. If you believe that margins could increase with the inclusion of bills, then it’s definitely worth thinking about.
It’s estimated that the UK pet population of 51m, with 44% of households having one or more pet. Therefore, there is demand for rental accommodation that allows pets, and owners are typically willing to absorb extra rent payment amounts in order to live with their furry friends. Extra precautions may need to be made to ensure the spaces are ‘pet-proof’, but tends to be inexpensive.
There are plenty more home improvements property owners can carry out, inside and outside of the homes. By optimising the outside spaces (garden, balconies and common areas) it can have the same positive effect.