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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 rental yields and ensure a healthy return on investment. There are several ways to achieve this, from optimising rent prices to reducing void periods. In this blog post, we’ll discuss some tips for increasing rental yields for landlords.
Optimise Rent Prices
Optimising rent prices is crucial for portfolio landlords looking to increase their rental yields. It involves setting rents 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. You can use a variety of tools to gather information, such as property websites, local estate agents, and rental indexes.
When setting your rents, it’s essential to take into account factors such as property type, size, location, and condition. For example, a well-maintained property in a desirable location may command higher rents than a property in a less popular area. However, it’s important to strike a balance between maximising rental income and ensuring that your properties are still affordable for tenants.
Regular rent reviews can also help you keep up with market trends and adjust rents accordingly. Set a schedule for rent reviews, and make sure you give tenants sufficient notice before making any changes. Be prepared to negotiate with tenants if necessary and consider offering incentives such as a reduced rent increase for long-term tenants.
In addition to conducting market research and regular rent reviews, there are several tools and resources that can help you optimise your rent prices as a landlord. Here are a few examples:
- Rental Yield Calculator: This tool can help you calculate your rental yield, which is 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 you make informed decisions about rent 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 rent optimization features, allowing you to track rents, set up automated rent increases, and compare your rents to local market trends.
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 rental property is vacant and not generating any income, can have a significant impact on your rental yields as a landlord.
One of the most crucial ways to increase occupancy rates is by marketing your properties effectively. Use a variety of channels to promote your properties, such as property 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, ensuring that your 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 rent reductions due to issues with the property. 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. Ensuring that 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.
Invest in Property Improvements
Investing in property improvements is an excellent way to increase your rental yields as a 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 property improvements:
- Identify the Right Improvements: To invest in the right improvements, consider what features tenants are looking for in a rental 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 rental 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, ensure that they are reliable and have experience working on rental properties. They 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.
Expand Your Portfolio
Expanding your property portfolio is another way to increase rental yields. Consider investing in areas with high demand and good rental yields, such as London. 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.
Consider Using a Property Management Service
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 ensure your properties are well-maintained, and your tenants are happy, ultimately leading to higher rental yields.
Discover City Relay’s end-to-end property management service, which includes a two-stage tenant vetting process, round the clock support, and a custom personalised experience. If you have any questions don’t hesitate to get in touch with one of our experts today.
Increasing rental 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 rent prices, increasing occupancy rates, investing in property improvements, expanding your portfolio, and using a property management service, you can increase your rental yields and ensure a healthy return on investment. Remember to conduct thorough research, seek specialist advice when needed, and stay on top of regulatory changes to ensure that your portfolio is successful in the long term.
