Are you getting the most from your rental investment? Are you achieving the best return on your rental? When was the last time you had a rental review? More importantly, when did you invest some of your return back into your property? Now isn't the time to be complacent about your rental. It's competitive out there. There are loads of properties of a high standard all seeking the same thing as you - minimum void periods, a good rent and a long term, respectful, happy tenant. And contrary to what the media is saying, rents are not necessarily increasing, particularly in central London. Tenants are savvy too. They know what's available on the market and therefore what they can get for their money. They know what they want and often aren't afraid of negotiating. So now more than ever it's important to ensure that you are doing all you can to make sure you are getting the most out of your investment. Are you doing all you can to get the best returns? Below we look at a few points to consider to make sure you are.
Are you getting the most from your rental investment?
Are you achieving the best return on your rental?
When was the last time you had a rental review?
More importantly, when did you invest some of your return back into your property?
Now isn't the time to be complacent about your rental. It's competitive out there. There are loads of properties of a high standard all seeking the same thing as you - minimum void periods, a good rent and a long term, respectful, happy tenant. And contrary to what the media is saying, rents are not necessarily increasing, particularly in central London.
Tenants are savvy too. They know what's available on the market and therefore what they can get for their money. They know what they want and often aren't afraid of negotiating.
So now more than ever it's important to ensure that you are doing all you can to make sure you are getting the most out of your investment.
Are you doing all you can to get the best returns? Below we look at a few points to consider to make sure you are.
When was the last time you painted your property?
Is it fairly neutral? Have you replaced your kitchen?
Peeling laminate? Oven from the 1970s?
Still have an avocado or pink bathroom suite with carpets?
Carpets threadbare or stained?
If you've answered yes to any of the above or haven't updated your property in a while it's time to start planning some improvements.
While some landlords might be hesitant spending money on a property that they don't live in and potentially receive an income from, it is important to take a longer term approach and invest in making your property the best it can be. A new kitchen, fresh paint or new carpets can go a long way in not only adding to the appeal when letting the property, it can also mean that tenants want to stay there longer.
That's also true if you give tenants the freedom to personalise the property. This can be as little as adding their own furniture or pictures to agreeing to let them paint the walls a new colour. Anything that helps a tenant to envisage the property as a home may mean that they decide to renew their agreement.
However, when you are decorating or making property improvements, it's important to think about your target market. For students the property needs to be easy to clean and comfortable but not luxurious. Young professionals generally expect it to be modern and stylish but not overbearing. If it is a family they will have plenty of their own belongings and need a blank canvas. If it's for HNWI (high-net-worth individuals) then only the best will do. So make sure the amount you are spending correlates with the return you are likely to get back.
It's important to consider your target market for more than just interior design reasons though. You may well want to let to a family but if you've bought a large property close to a university you may find that you get more enquiries from students looking for a home for multiple occupants. Make sure you constantly keep your eye on what is happening around the property and who is moving there. Making a small change to who you are trying to appeal to could be the difference between letting your property or it sitting empty.
Are you keeping an eye on what's happening in your local property market, especially with similar rental properties? If not, you could be charging the wrong rental price.
If you've had the property for a long time, the market conditions in your area could have significantly changed, meaning that prices could have too. You need to ensure that you're charging the market rate for your property and not undervalued it to ensure you get the best return.
The converse can also be true though. Although rental properties often give monthly yields, the market determines how much someone is willing to pay for it, not your mortgage repayments. If you are not making enough money to cover your costs it may be time to think about selling unless you are confident of the long term investment.
It is also important to review your rental price if your property is renewed. Unless stated in the contract how much the rent will increase at the point of renewal, it is a good idea to raise the price to reflect market conditions as this will mean that you are not missing out on that all important return. While you don't want to put your current tenants off, most expect a small price rise annually.
One of the easiest ways to ensure your property is constantly let and therefore you are getting the most from your rental is to try and keep hold of your tenants if they are conscientious and reliable.
Good tenants that renew their agreement for another year will mean that is another year of guaranteed rent. But keeping hold of good tenants means in turn that you need to be a good landlord to ensure they want to stay.Carrying out repairs in good time and to a high standard, fulfilling your parts of the contract and allowing the tenants to make the property feel like home (such as the decorating tips above) will mean that they will be less likely to look for an alternative property at the end of the tenancy if their property needs remain the same.
However if your tenants are moving on, if you have been a good landlord and kept the property in a good condition, they may recommend it to a friend and again lower the risk of void periods.
Rental properties can be great investments but as you know they can be a big responsibility.
Legislations and regulations change often and it is vital you keep up-to-date with what is expected of you to end up in a position where at best you can't rent your property or at worst you face criminal charges. Recent changes include Legionnaires disease, which requires landlords to get their property checked by a professional, and fire alarms, which are now compulsory for all rental properties.Updates of requirements for rental properties can be found on the HMRC website and from organisations such as ARLA.
It is also a good idea to ensure you are familiar with the check list of requirements throughout the tenancy period, from before the tenant moves it to when they check out. Click here for a check list or alternatively you can speak to one of our lettings experts. Click here to get in touch.
If you are looking for new tenants don't wait until the end of your current tenants' agreement. As soon as you are aware the tenants aren't planning on renewing, which is generally two months before the end of the tenancy period, you should start putting plans in place.
If you are planning on using a letting agent you will need to instruct them so they can prepare any materials and start looking for suitable tenants or if you are planning on going it alone, then you need to think about how you are going to market the property.
Although viewings can be easier once the existing tenants are gone, as the property is clear of their belongings and guaranteed to be clean, it means that you are not getting paid all the time the property is vacant. So it is worth doing this while the existing tenants are still there. However, make sure that once you are ready to do viewings with potential tenants, you abide by your contract with your current tenants and inform then in the correct amount of time for any viewings.
If you choose a letting agent to help you rent your property it is important you get one that will help you achieve the best rental price and find good tenants as quickly as possible.
In order to do this, you need an agent that has their fingers on the pulse of the property market in the local area as well as a wider view, be able to advise you every step of the way and have the tenants you need. It's worth speaking to a few agents to see what they can offer you and to ensure that your property is correctly priced. If you would like to speak to Winkworth about your rental property click here.
Property management companies are also worth looking into if you don't want to handle the day-to-day responsibilities of a rental property. For a small fee, they can collect rent, organise repairs, carry out inspections and deal with tenants directly so you don't have to. You don't want to have to constantly chase your agent, so ensuring that they are proactive and organised will take a huge weight off your shoulders and may help to lead to a renewal or recommendation to avoid long vacant periods. To speak to Winkworth about our property management services, click here to find your local agent.