Looking to increase your rental yield and boost your property profits in 2023? We have the answers...
Ahh, increasing your rental yield. Boosting your property profits. Making your investment work for you. Isn’t this what we all want to do?
For those of you who really want to succeed in property, it’s important to consistently ask yourself honest questions – are you charging the right rent? Are you keeping on top of your outgoings? Could you convert your property to make it work better for you? It's a great time to be a landlord, especially with rents continuing to increase and good profits to be made - despite rising costs.
By the time you’ve read this article, you will have a better idea of what you’re doing right or wrong – and how exactly you can increase your rental yield. Let’s get started.
Should I increase the rent?
The simplest way to increase your yield is via a rent increase. However, there is a risk involved in raising prices. Before you make a decision like this it’s important to consider a number of factors.
If you have reliable tenants who appear to be settled, you’ll have to weigh up whether it’s worth unsettling them with a price rise. Good tenants can be hard to find and replacing them may end up costing more in the long term. As a guide, study the prices being offered for similar properties in your local area. If your prices seem low in comparison then you can justify making a change.
If you’re uncertain what your rental property is worth in the current market, the first step is to book an expert valuation. Our agents offer expertise in the local marketplace and ensure your rates are competitive so a valuation is a great place to start.
Are my outgoings too high?
Lettings, like any business, have outgoings and many of them will be subject to change on a regular basis. However, you should take the time to ensure you’re getting the best possible deal on all of your monthly outgoings. Moving forward, it’s always worth checking what new offers are available.
Should I convert to a Home in Multiple Occupation (HMO)?
A Home in Multiple Occupation, or HMO as they’re commonly referred to, is a single property rented by three or more private tenants. The occupiers are contracted separately and have their own private quarters but often share facilities such as a kitchen or bathroom.
If your property is not already a Home in Multiple Occupation then it may be worth converting it into one as it is often far more profitable long term, and easier to manage. There may be some costs in the early stages and a license may be required, but it is likely to be a wise investment.
Could I add more bedrooms?
If your rental property has a room or space that is not being utilised, a dining room or attic space, for example, consider turning it into a bedroom. The process of conversion may involve some small costs but the potential to bring in added revenue in the months ahead should make it profitable.
Note: be sure to check if planning permission is required before making alterations.
Who is my target market?
If you understand your property and the area in which it’s situated you’ll have a good idea of the type of people who are likely to rent from you. It could be students, young professionals, or a family, etc.
Setup your property to cater to the needs of the tenants you want to attract to increase its appeal. Consider the fact that remote working has increased in popularity, so high-speed internet and space to work from home will be invaluable.
Is my property energy efficient?
Explore the potential for making your home more environmentally friendly and reducing your energy rating. This has a dual benefit of not only making the letting more attractive to those who are conscious of their carbon footprint, but also reducing energy bills which, frankly, appeals to everyone!
We hope you found these helpful. There are always ways to make being a landlord that little bit more lucrative. For more tips on how to increase your yield visit our blog.
Or, if you’d like to speak to one of our local lettings experts about property management, get in touch today.