A portfolio landlord is defined as those with four or more mortgaged buy-to-let properties. As a portfolio landlord, it goes without saying that one of your main goals will be to maximise yields and ensure a healthy return on investment. There are several ways for landlords to achieve this, from optimising rates to reducing void periods. In this blog post, we’ll discuss some tips for increasing yields for portfolio landlords.
1. Optimise Rent Prices
Optimising rent prices is crucial for portfolio landlords looking to increase their yields. It involves setting rates that are competitive with the local market while still maintaining a healthy profit margin. Conducting thorough market research is the first step in this process. Landlords can use a variety of tools to gather information, such as property websites, local estate agents, and rental indexes.
When setting your rates, it’s essential to take into account factors such as property type, size, location, and condition. For example, a well-maintained home in a desirable location may command higher rates than one in a less popular area. However, it’s important for landlords to strike a balance between maximising income and ensuring that their properties are still affordable for tenants.
Regular reviews can also help portfolio landlords keep up with market trends and adjust rates accordingly. Set a schedule for reviews, and make sure you give tenants sufficient notice before making any changes. Landlords should be prepared to negotiate with tenants if necessary and consider offering incentives such as reductions for long-term tenants.
In addition to conducting market research and regular reviews, there are several tools and resources that can help you optimise your prices as a portfolio landlord. Here are a few examples:
- Rental Yield Calculator: This tool can help portfolio landlords calculate their yield – the annual rental income as a percentage of the property value. It can be a useful way to compare the profitability of different properties and help landlords make informed decisions about prices. Get a calculation today with City Relay’s custom rental valuation calculator here.
- Rental Indexes: Rental indexes provide data on the average rents in a particular area, making it easier to set rents in line with the local market. Some popular rental indexes include Zoopla, Rightmove, and Home.co.uk.
- Property Management Software: Many property management software solutions include optimization features, allowing you to track rents, set up automated increases, and compare your rates to local market trends.
2. Increase Occupancy Rates
Occupancy rates refer to the percentage of occupied properties in your portfolio at a given time. Void periods, which refer to the periods of time when your property is vacant and not generating any income, can have a significant impact on your yields as a portfolio landlord.
One of the most crucial ways for landlords to increase occupancy rates is by marketing their properties effectively. As a landlord, you should use a variety of channels to promote your properties, such as websites, social media, local newspapers, and even word of mouth. Ensure your listings include high-quality photos and detailed descriptions of the property’s features and benefits. Also, consider investing in professional staging and photography services to showcase your properties in the best possible light.
Additionally, portfolio landlords ensuring their properties are in good condition before tenants move in is an important step in ensuring high occupancy rates. Conduct thorough inspections to identify any maintenance issues that need to be addressed. Fixing any problems promptly will help prevent tenants from leaving or requesting reductions. Additionally, regular maintenance and upgrades will help keep your properties competitive in the market, making them more attractive to potential tenants.
Responding quickly to tenant issues and concerns is essential to keep tenants happy and reduce void periods. As a landlord, ensuring you have an efficient and responsive property management system in place is integral. This system should include processes for handling maintenance requests, addressing tenant complaints, and responding to emergency situations.
3. Invest in Property Improvements
Investing in improvements is an excellent way to increase your yields as a portfolio landlord. Upgrading and improving your properties can make them more appealing to potential tenants and can result in higher rents and more extended tenancies. Here are some tips on how to invest in improvements:
- Identify the Right Improvements: To invest in the right improvements, landlords should consider what features tenants are looking for in a property. Some improvements, such as a fresh coat of paint or new flooring, can be cost-effective and provide a significant return on investment. Others, such as adding additional bedrooms or bathrooms, can be more expensive but may result in higher yields. Consider consulting with a property management company or real estate agent to help identify the best improvements to make.
- Budget Wisely: Before investing in property improvements, create a budget and stick to it. Avoid overspending on unnecessary upgrades that may not provide a return on investment. Remember that investing in property improvements is a long-term strategy that requires careful planning and budgeting.
- Hire Reliable Contractors: When hiring contractors to complete property improvements, landlords should ensure they are reliable and have experience working on rental properties. Contractors should have a good reputation and be able to provide references. Be clear about your expectations and the timeline for completion to avoid delays and ensure the project stays on budget.
- Consider Eco-Friendly Upgrades: Eco-friendly upgrades, such as installing energy-efficient appliances or upgrading insulation, can help reduce your properties’ energy bills, making them more attractive to tenants. Additionally, eco-friendly properties are becoming increasingly popular among tenants who prioritise sustainable living. Discover some of the best eco-friendly products and services on the market here.
4. Expand Your Portfolio
Expanding your property portfolio is another way to increase rental yields for landlords. Consider investing in areas with high demand and good yields, such as London and other major cities. Research the local market and identify areas with potential for growth. Remember to conduct thorough due diligence and seek advice from a specialist mortgage advisor to ensure you are making a sound investment.
Discover our top tips for expanding your property portfolio here.
5. Consider Using a Property Management Service
For landlords, managing multiple properties can be time-consuming, and as your portfolio grows, it can become increasingly challenging to keep on top of all the administrative tasks involved. Consider using a property management service to handle tasks such as tenant selection, rent collection, and property maintenance. This can help landlords ensure their properties are well-maintained, and that tenants are happy, ultimately leading to higher yields.
Discover City Relay’s end-to-end property management service, which includes a two-stage tenant vetting process, round-the-clock support for both landlords and tenants, and a custom personalised experience. If you have any questions don’t hesitate to get in touch with one of our experts today.
Increasing yields is one of the biggest challenges that portfolio landlords are likely to face, and to do so requires careful planning and management. By optimising prices, increasing occupancy rates, investing in property improvements, expanding your portfolio, and using a property management service, you can increase your yields and ensure a healthy return on investment. Landlords should conduct thorough research, seek specialist advice when needed, and stay on top of regulatory changes to ensure that their portfolio is successful in the long term.