Maximising rental yield is a critical objective for every successful landlord. It ensures that you can comfortably cover the costs of mortgage repayments, maintenance and repairs, and make a good profit.
The disparity between reaping profits from letting a property and barely breaking even can be stark. However, it’s also vital to ponder over the long-term implications of your choices and their impact on your tenants. Numerous elements must be considered as you contemplate ways to augment your rental yield.
Even though you might currently feel boxed in by certain factors like property location or market prices, we look at your options to maximise your rental yield.
Strategic investments
Venturing into property investment necessitates thorough research, unwavering dedication and hard work. Each acquisition will enrich your experience, equipping you better for future investments. Nonetheless, each new property should be treated as a distinct business decision. A meticulous examination of each potential investment and astute negotiation is fundamental to optimising your returns.
Analysing fixed expenses
The first step involves evaluating your fixed costs when strategising to boost your rental yield. These encompass mortgage payments, insurance premiums and leasehold fees. It’s worth exploring the market to determine if you can secure a more favourable mortgage and building insurance deal.
Investing in high-growth areas
Identifying prime locations can significantly enhance your rental yields. Which towns and cities are on the rise, benefitting from planned regeneration and government investment? Major infrastructure projects can catalyse growth in certain areas, promising heightened capital growth and increased rental values down the line.
University towns and cities are also lucrative locations, offering higher yields. Properties rented by multiple tenants – known as Houses of Multiple Occupation (HMOs) – can be particularly profitable despite the downside of a higher tenant turnover.
Re-evaluating your rental charges
A straightforward approach to improving rental yield is to levy a higher monthly rent. However, this may not always be justified or equitable. Consulting a letting agent to gauge the market rate for similar properties in your vicinity is advisable.
You might discover that you’re charging less than the market rate or, conversely, that you’re overcharging. Rent review clauses in tenancy agreements allow you to adjust the rent during a tenancy.
First impressions matter
When letting a property, first impressions matter. The condition of your property plays a pivotal role in justifying any prospective rent increases. A well-maintained property is more appealing to potential tenants and fosters long-term tenancies.
Refurbishing and redecorating can significantly enhance your property’s appeal. Simple updates such as repainting, carpet replacement and kitchen or bathroom renovations can make tenants feel more comfortable paying a slightly higher rent.
Securing long-term tenancies
Securing long-term tenants is one of the most effective strategies for increasing rental yield and reducing expenses. Continual tenant turnover can be costly due to one-off costs associated with new tenancies and maintenance expenses.
You can encourage longer tenancies by being vigilant during your tenant referencing process, maintaining your property well and building positive relationships with your tenants.
Embracing pet-friendly policies
Standing out in the rental market often requires a unique selling point. One such advantage could be making your property pet-friendly. With the number of pet-allowing rentals dwindling, especially following the Tenants Fee Act which limits landlords’ ability to charge higher deposits for potential damage, offering a pet-friendly environment could attract tenants willing to pay a premium.
Enhancing energy efficiency
Another way to enhance your property’s appeal while potentially increasing rent is by improving its energy efficiency. Energy-efficient homes reduce bills and offer a warmer, more comfortable living environment. This could be used as a selling point, enticing tenants with the promise of lower heating costs.
Exploring property extension opportunities
While not an option for all landlords, it may be worth considering adding more rentable rooms or increasing the living area if you have additional space. For instance, transforming an attic into another bedroom could significantly increase your rental yield.
Ready to explore your buy-to-let funding options?
By adopting these tactics, you can significantly enhance your rental yield, ensuring your property remains profitable. Whether you are a first-time investor or a seasoned property owner looking for funding options, our experienced team will guide you every step of the way. Get in touch with us today!
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
