3 ways to optimise the value of your rental property
by Rizwan Osman on 8th February 2019
Every landlord wants to get the most out of their rental property, so in this post, we’ll guide you towards optimising your property’s rental value.
Rental value is a specific figure that is calculated by the formula: Rental value = ((Weekly rent x 52) ÷ property value) x 100. The optimised rental value is achieved when both the average weekly rent and the value of the property are as high as possible. The rental value is reduced if the property earns low weekly rents or lies empty for some weeks and, while the property value is closely dependent on the housing market, many of the action’s landlords can take to increase their weekly rental income will also improve the market value of their property.
Make the basics better than basic
Rental properties have a reputation for being less than lovely. That may have been fine in the days when tenants stayed for only a short time, but nowadays tenants stay for longer, and they expect more.
To optimise rental value, landlords need to fit their properties out carefully. Going for a neutral colour scheme, durable rather than basic furnishings and fittings, and making the most of any outdoor space associated with the property will pay dividends in terms of attracting and maintaining tenancies. Simultaneously, it will boost the market value of the property when the time to sell arrives.
Landlords must also maintain their properties well. That means regular inspections and rapid responses when tenants point out problems. Being a good landlord is part of optimising rental value.
Work hard on the less desirable aspects
Many rental properties have poor quality kitchens and bathrooms, so well-presented and carefully maintained kitchens and bathrooms are a powerful incentive for tenants to move in. Such kitchens and bathrooms also make tenants want to remain in the property, reducing the number of empty weeks and increasing the place’s rental value.
However, landlords need to beware that kitchens and bathrooms get shabby and tired more quickly than other rooms. Refurbishment or replacement will be needed far more often than in a private home. The money it costs will be money well spent however, because keeping these rooms in tip-top condition is key to optimising rental value.
Target niche markets
Careful research into the local rental market may reveal niche groups of tenants who will be prepared to pay extra for the facilities they need or want.
These might be tenants who desire high-spec appliances, top quality furnishings and superb lighting. Fitting such features is a small one-off cost in comparison with the rental income it will generate for the right property in the right neighbourhood.
Where parking is at a premium, landlords can profit by offering an off-street parking solution. Or some tenants may require a granny-annex. If landlords can provide this facility by converting a few rooms, they’ll again attract higher rents by meeting another niche need.
One of the most unexpected and easily accommodated niche groups are pet owners. Traditionally, landlords have prohibited tenants from keeping pets. This means there are some pet owners who find themselves unable to keep the canine or feline friends they desire in their rental properties. Through careful discussion and setting up specific pet tenancy contracts, landlords can appeal to tenants who will be prepared to pay extra for the privilege of being able to own the pet they’ve always wanted.
There is no need for landlords to struggle with optimising their property’s rental value on their own.
Local knowledge is invaluable, and we are here to help. Get in touch and we will help you to get the most from your rental properties.