How to maximise your rental income by Abacus Solicitors

Thursday, 9 November 2017
Regardless of whether you’re a landlord with a diverse property portfolio, or an individual starting out in property investment, you’ll undoubtedly want to make sure that you’re maximising your returns.

With the uncertainty around Brexit and the resulting volatile economic climate, it’s important to protect your investments and reduce the risk of losses.

Fortunately, you don’t have to leave this to fate. There are steps that you can take to maximise your rental income from your buy-to-let property and work towards a financially sound future. Read on to discover some of the ways that you can maximise the returns on your buy-to-let property.

Choose the right location

Statistically, there are some areas in the UK that are better for buy-to-let proprietors. This handy ‘buy-to-let hotspot’ map from Totally Money shows you a map of Great Britain and the areas with the highest yields on buy-to-let mortgages.

If you’re considering investing in property, this is a great place to start as it gives you a rough idea of the locations in the UK where you’ll obtain the highest return on investment. However, this alone will not maximise your rental income.

Choosing a location where you’re likely to achieve a higher yield increases your potential of obtaining higher returns, however you’ll need to consider tenants and the property’s condition, along with a number of other factors, to ensure you’re making the most of your investment.

Consider renovating your property

Sprucing up your property can make it all that more appealing to potential tenants. This is an easy way to maximise your rental income and create more demand for your property.

A study by Savills revealed that space is the most important feature for tenants, with 28 percent of respondents listing this as their ‘must-have’ when looking for a property. As such, it may be worth looking at building an extension or adding extra rooms to your property, to increase its appeal to potential tenants.

Research from Zopa has also revealed which home improvements add the most value to your property. A conservatory came up top with an average 108 percent return on investment, whereas a new bathroom will provide investment returns of 48 percent.

Taking the time to renovate your property can provide significant opportunities when it comes to maximising your rental income. However, it’s important to consider what types of tenants you want to attract.

For example, it may not be worth investing in a conservatory if you want to attract students, however, this feature may be appealing to older couples and families.

Find and attract the right tenants

Landlords will have different opinions as to what they consider to be ‘good’ tenants. However, on the whole, tenants who pay on time and are looking to rent long -term are desirable, as they can provide a steady stream of income for you as a landlord.

First, you need to decide what type of tenants you’re trying to attract. Whether it’s families, students or young couples, it’s likely that these different groups are looking for homes in different places and will offer different yields.

It’s well known that letting to students can provide high yields, so much so that some real estate developers have seen profits of as much as £60,000 per room over two years, from building student halls and selling them on.

However, with student letting, there’s usually more wear and tear and as such, you may be liable to more maintenance costs. This is something to consider if you’re buying to let for the first time or if this is your first venture into student housing.

Of course, there’s a world of options to consider when strategising the growth of your rental income, however it’s well worth considering the tips above to kick-start your improvements.

Abacus Solicitors provide high-quality legal services from their Manchester-based offices. Specialising in various services, from property law to dispute resolution.