Being a landlord comes with a lot of challenges, but the biggest long-term challenge is getting a good return on your investment. Your rental property should not just be paying for itself, it should be making you money every month. This gives you more money to make more investments in more property, growing your portfolio and turning your small rental business into an empire. With these high-yield investments, you can speculate a little to accumulate a lot and get some extra money from all of your properties.
Pay Attention To Detail
The rental property market is very competitive. There are many private landlords out there, each with a unique property that has to stand out from the crowd and draw in potential tenants. To get the right kind of long-term tenant that always pays their rent, you need to have plenty of candidates to choose from. Taking care of the small things and paying attention to decor details can be a low-cost way to push up your rental value and make it a desirable choice for people looking for a home.
Fixing small problems like leaking taps, noisy radiators, or low water pressure can all make your property more attractive to renters. You can find plumbers near me on MyBuilder, with reviews from satisfied customers to help you find your perfect plumber. With their help you can spruce up your rental property for a little extra yield and a lot more interest.
Maximum Space For Maximum Yield
The best way to add more value to your property and get a higher yield from your rental income is to add space. When you can add a bedroom to a rental apartment or house you make a huge leap in monthly rental value, and open your property up to a wider range of tenants. Multiple bedrooms makes a home suitable for a whole family and not just a professional couple or single tenant.
It is a big investment to make, but can often be a smarter financial choice than adding a whole new property to your portfolio. For a fraction of the cost of another rental property you can add an extension to an existing one on your books and get a better return on your investment. It is quicker and easier to arrange than a property purchase, and easier to finance too.
Make The Outdoors Great
Do not be a landlord that neglects the exterior of your property. How your rental property looks from the street and in photos will affect interest from potential tenants. People are much less likely to be interested in a property that looks poorly maintained and dirty. The appearance of the property will tell tenants a lot about you as a landlord. Add some kerb appeal to give the right impression.
Give the front of the property a fresh look and some colour, and then turn your attention to any space at the back or side. Can you give this area some usable living space? An outdoor eating area or lounging spot can help tempt tenants into renting and add some extra yield to your investment. Making a few small, low-cost changes can give you a low maintenance garden with a form and function.
Home Heating And Insulation
Your rental payment is not the only bill that your tenants have to pay and they will be taking that into consideration when searching for potential homes. Heating costs have increased dramatically in recent years and show no signs of slowing down. Insulating cavity walls and loft spaces with the latest home insulation materials can help keep the heat in, cutting down on costs.
The energy efficiency of a rental property is becoming more and more important, with many landlords scrambling to meet the requirements of new legislation like Energy Performance Certificates (EPCs). By 2028 all tenancies must be in rental properties with an EPC rating of C or above. Insulating your property and upgrading windows and doors to double or triple-glazed uPVC can help landlords reach this rating and future-proof their tenancy agreements. More regulations are likely to come in the near future too, or the rating raised to help the country meet its climate goals.
Go Even Greener
The homes of the future are going to generate a lot of their own electrical power. The demands being placed on our current electrical infrastructure are getting harder to sustain, and the costs of both electricity and natural gas are growing all the time. One of the smartest investments you can make in a property today is adding solar panels to the roof and battery storage in the home.
These systems allow energy generated from sunlight during the day to be used at night, drastically cutting energy costs for the average home. With the right setup you can even sell excess energy to the national grid creating a small income stream on top of your investment. People are prepared to pay a little more to live in a home with an efficient solar power system as they will save more on energy costs.
Renovate The Kitchen
The kitchen is one of the highest value spaces in any home and one that can make or break a potential tenancy. There is little point in having a nice rental property with contemporary living spaces if the kitchen is out-of-date with old appliances. Modern kitchens are smart investments, they add property value, entice tenants, and can push up your monthly rental price. The kitchen is the heart of the home, give your property an attractive and modern centrepiece with a renovated cooking space.
Appliances can be a key selling point in a kitchen. Modern energy efficient washing machines, ovens, and dishwashers if you are feeling generous can all help turn an interest renter into your new tenant. You can save money here too by taking advantage of special offers or financing deals that will help you increase the yield from your investment. Interest free financing is a great option, as you can use your rental income to make the payments so the investment pays for itself in the first couple of years.
Use A Property Management Company
This can be a controversial choice for some landlords. Handing over responsibility for finding tenants and collecting rents does come at a cost to your monthly yield, but it can save you money in the long run. Firstly, it buys you time. Taking these responsibilities off your plate gives you more time to concentrate on other aspects of your business or personal life. It can also guarantee your rental income.
Many property management companies will pay your monthly rental income even if your property is without a tenant. These companies are so confident they can keep your property occupied they will guarantee the rent payments, giving you an income you can rely on. The cost to your yield is easily recovered if your property does spend a month or two empty.
Put all these property improvements together, and you will be maximising the yield from your portfolio. Not only will you be covering the costs of any mortgage or financing on your rental property, but you will also be realising a regular income. You can put this straight in your own pocket or use it to invest in even more rental property.
