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Are you wondering how to increase rental yield? Despite current economic uncertainty, buy-to-let property is expected to be profitable throughout the course of 2023. As a landlord, looking for the highest local demand might be a priority, and rental yield is also imperative in a fluctuating market.
Whether you’re looking to increase your property portfolio or you’re expanding into a new area, rental yield should be factored into your final decision. And while securing the highest rental yields might not always be straightforward, there are a few tactics to pick up along the way.
Increase Rental Yield: What Is It and Why Is It Important?
Both private landlords and investors monitor the value of their portfolios and investments using rental yield. So, before making major decisions, buy-to-let landlords need to understand the importance of rental yield for their next acquisition.
Essentially, rental yield is the potential ROI on buy-to-let property investment.
Presented as a percentage figure, it’s worked out using the value of the property alongside annual rental income. The final figure can be affected by variables including volatile markets, house prices, level of demand, and rates of interest.
Why Is Rental Yield Helpful for Investors?
Before finalising a buy-to-let purchase, you should work out what to charge to make your investment worth it. If you’re only just breaking evening, unexpected circumstances – even if they only need an easy fix – could leave you in serious trouble.
Keeping an eye on your property’s rental yield is a solid strategy to help you keep up with competitors and other factors affecting the market, with house prices and mortgage approvals continuing to fall.
How Can I Increase Rental Yield?
When it comes to increase rental yield, you should consider does your rent reflect the value of the property? When you’re setting a price, you’ll need to think about the main selling points – and the bad bits – about the property. But if you’re surrounded by competitors asking for a little bit more from their tenants, you might be able to capitalize on the popularity of the local market.
Keep It Looking Fresh
Regardless, it’s always worth keeping your rental property looking its best to justify the price of your rent. Attract new tenants and avoid prolonged empty periods by making sure that you refurbish in between tenancies, providing basic décor and home comforts to appeal to prospective tenants.
Reduce Maintenance Costs
Does your property always seem to need regular maintenance? If you’ve started to spend more money on repairs than investing in better quality parts or appliances, it could be time to order a few replacements. Try to keep maintenance costs lower by using high-quality fixtures and fittings.
Add Extra Bedrooms
Adding extra bedrooms could help you to generate extra rent income. Providing more space increases the value of the property – but try to be realistic when converting smaller spaces into bedrooms. If you’re letting out an HMO, it’s more sensible to aim for bedrooms of a similar size to keep tenants satisfied.
Focus On Long-Term lets
Lastly, you should channel your efforts into attracting tenants who choose to stay in your property long-term. This reduces the chances of your property being unoccupied for extended periods of time, giving you more opportunities to foster a good relationship with your tenants.