As new regulations take a tighter hold on the property market, one thing is certain: the atmosphere surrounding investment property has changed. Where the phrase ‘my property is my pension’ was once commonplace, changes to the climate have left many landlords around the country forced to make savvier choices in order to maintain or grow their rental returns.
So, what does it take to get the most out of your investment property? Below, I’ve compiled my best tips on how to thrive in the modern market.
Choose an up-and-coming area
Before looking at properties, you will need to carefully consider the location of your investment property. Do your research carefully and take note of areas marked as ‘up and coming’. These are areas that definitely aren’t considered ‘prime’ but have the potential to see growth. Maybe due to plans in place for a new shopping centre, transport offering or other rejuvenating project. Purchasing a home in one of these areas increases your likelihood of increasing your revenue through sale or rental yields.
Choose your mortgage carefully
Walking, unprepared, into a building society or bank and asking for a mortgage isn’t your best strategy. If you’re considering an investment property, speak to a specialist financial advisor. They will analyse your current financial situation and advise you on the best mortgage strategy available.
Consider your ideal tenant
Different tenants will have different priorities. If, for example, your target tenants are students, understand that there needs are basic; a clean and fairly priced property, without anything too luxurious or breakable inside, will do perfectly. Young professionals have a different remit, they could be in the market for a modern flat that is stylish without being fussy. And families with many possessions, could be after a completely blank slate, somewhere they can put their own stamp on. A quality property, that appeals to your ideal tenant, is more likely to get you long-term tenants, faster. It can also sometimes result in higher rental prices too, as tenants compete to live in a highly-desirable property.
Price the rent thoughtfully
You should certainly be asking a fair rental price for your property, something that’s reflective of the area and condition. However, be wary of raising the price too much, too soon – especially if you’re looking to retain your tenants in the long-term. Raising the price of rent every few years to align with inflation and account for any property upgrades is a good idea, but raising the price to ‘see what you can get’ may result in longer void periods.
Don’t be afraid to upgrade
Upgrades are the bread and butter of getting the most out of your rental property. Not only will they make your property more aesthetically pleasing, but as house prices rise, you’re able to meet modern renter’s expectations, which for premium tenants, is an all-round, high-quality rental experience. These are the tenants that will appreciate (and be willing to pay a higher rent for) new countertops and floors. Also, don’t forget the fixtures; landlords should be replacing sinks and faucets every 10 years as these are the components experiencing the heaviest wear and tear.
When tenants come to view a property, they first consider if they see themselves living there, and then ask if their possessions will fit. Don’t underestimate the value of storage, especially closet space. Many tenants consider storage space a priority. Adding hooks to an entryway, an extra shelf in the cupboard, or even built-in wall storage can make a world of a difference when it comes to getting the most out of your property.