Your buy to let property is a business – a business that relies on the income you receive from your tenants. An underlying and fundamental goal of your business, therefore, is to maximise your rental income.
Here are some tips and suggestions about doing just that:
Know your market
- as with any other business, knowing your market – what your customers want – is essential;
- when your customers are tenants, that is a question of balancing the amount of rent you charge with considerations such as the property’s location, the type of tenants you are likely to attract and the standard of accommodation you offer;
- when it comes to standards, remember that the let property is for your tenants and not for you – tenants may be prepared to compromise on standards in order to secure a lower rent;
- nevertheless, whatever kind of tenant you seek, your rental income is likely to be maximised if you ensure the property has no problems with damp or condensation, is easy to heat, is in a good state of repair, has had a recent lick of paint and recently been cleaned, suggest estate and lettings agents Fife Properties;
Kitchens and bathrooms
- tenants might not have the longer-term sense of home-making as an owner occupier, but they are still likely to be drawn to the “wow” factor of a properly modernised bathroom and fitted kitchen;
- how much you spend on any such upgrade of course depends on the particular sector of the market you are targeting and expenditure needs to be balanced carefully against any likely increase in the rent you are able to charge, suggests the property group Ezytrac;
Extensions and renovations
- building an extension or structurally renovating your let property may increase its capital value, but your primary concern as a landlord is whether the changes you make are going to be reflected in any boost to your rental income;
- a loft conversion, for example, may give you another bedroom, or a conservatory a greater sense of spaciousness – rather than any separate living space – downstairs;
- extensive improvements such as these may suit some rental properties more than others in playing a part in boosting rental income;
- catering for a quite different market, you might want to consider a suitable property for conversion into a House in Multiple Occupation (HMO);
- in this way, you may let the accommodation to three or more tenants, living as more than one household, and sharing facilities such as a bathroom and toilet and/or kitchen – so commonly known as a house-share;
- by choosing the appropriate sector of the rental market – students or others on low incomes – you may be able to boost the income you receive through such multiple occupancy arrangements;
- remember, though, that your responsibilities and obligations as a landlord of an HMO are greater and your property may need to be licensed by your local authority – if it is classified as a large HMO (of three or more storeys, housing more than five tenants in more than two households, you definitely need such a licence.
There are ways to boost your rental income, but, as in any business, it is likely to be a case of weighing up the additional investment required to improve or tailor your buy to let investment against the projected increase in returns.