If you’re a new or prospective landlord looking to maximise your income, then knowing the market you operate in is essential. In this post, we take a look at how you can ensure that your property portfolio is as profitable as possible.
Select the right location
The location of your property could make a big difference to the type of tenant you attract and the ease of letting the property. Regional variances in letting conditions are not uncommon and demand often fluctuates within regions.
For instance, if you opt to let a property in the countryside, you’ll more than likely to find it far easier to rent in the summer than the winter. Contrastingly, if you’re looking at properties in cities, although you’re more likely to have demand all year round, much of this will hinge on factors like employability and how much local competition there is.
To maximise your return, and to ensure your rent is set appropriately, you have to ensure that you know what supply and demand are like in your area. It’s important to know the details for the full year, as there may be seasonal fluctuations.
Value the tenants you have
Maximising your income doesn’t mean increasing the rent every year, particularly if you have good tenants who are willing to extend their agreement. This can also be true if the state of the local market has altered since you last let the property.
If your current tenants look after the property well, they’re valuable to you and should be actively encouraged to stay.
If you make it clear to these tenants that you’re looking to increase the rent, this may directly result in their decision not to renew the tenancy agreement.
Holding rent at the current level for a renewal could prove more valuable than remarketing at a slightly higher value. Plus, you’ll ensure that you have tenants you’re happy with, without the prospects of void periods during the remarketing process. Depending on demand, your property could be empty for a few months whilst you look for new tenants during that time you’ll need to cover your over heads like the mortgage or fees. However, this is your decision; just make sure you judge the condition of the local market first.
Letting the property quickly
Depending on the market outlook in your area, you may have to work hard to let the property and it certainly shouldn’t be taken for granted that it’ll let quickly.
For this reason, when arranging viewings, you should be flexible and welcoming. Many people find it hard to arrange viewings during the day. You may not want to work evenings or weekends but sparing the hour (or less) that a viewing will take creates a great first impression; it could make the difference between letting the property and the potential tenant looking elsewhere. If you don’t have time to manage the process, you may wish to consider using a letting agent’s let only service.
Likewise, look for gaps in the market. For instance, there may be a number of unfurnished properties available but no furnished ones. This’ll provide your property with a USP and could potentially help you find a tenant faster – Although time is of the essence you should always make sure that potential tenants have been fully referenced.
Freshen up the property
If you’ve just had a long-term tenant then your property may be looking a little tired, even if it’s only gone through the wear and tear that‘s acceptable in most tenancy agreements.
Repainting your property could make a huge difference. Properties are usually repainted every three years or so, depending on the condition of the property and tenant turnover. It’s best to choose either light or neutral colours as they create a light, ambient atmosphere, making it more attractive to potential tenants and giving you a better chance of achieving the desired rental amount. If your kitchen or bathroom is dated, they can still look great with a good clean and fresh coat of paint, saving you money on a new suite while maximising your income.
However, if you spot damp, then don’t just paint over it. A short term fix will cause you long term pain both in terms of your tenants wanting to stay and the cost of the ultimate repair bill if the damage is left alone.
Think about your flooring too. A new floor to replace tired old lino or stained carpets will instantly lift a room for very little effort. Take a look at our post on flooring to help you decide which type of flooring is best for your needs.
Make sure your fixtures are working
Aside from checking all of your safety certificates to ensure they’re all within the legal requirements, you should also conduct a more detailed analysis of your property before tenants view it.
Check the finer details, such as whether the door handles catch or whether toilets flush correctly. Likewise, check to see if any of your surfaces, such as the kitchen worktops, are starting to lose their sheen, or if there are any broken items around the home. Something as simple as a broken light fitting or a broken bulb can plant a seed of doubt in the viewer’s mind.
In addition, make it clear to prospective tenants that you plan to deal with any maintenance issues promptly, whether this is personally (if you have qualifications and live nearby) or through a handyman, or a lettings agency, if you live further afield.
There we have it, five ways to maximise your potential rental income. From selecting the right property in the right location, to making sure that you maintain it properly between tenants, maximising potential income can be easier than you think.