How to add value to your rental property30-08-2022 | Financial
Adding value to your rental property is an effective way to improve your yield and make the most of your investment. You’ll be creating a house that feels like a home and attracting tenants that want to look after the property.
We’ll share the best ways to add value to your rental property so you can turn a greater profit and re-invest in your property portfolio.
1. Offer something valuable
To add value to your rental property, you’re going to need to literally add something of value! The added extra you choose will depend on the type of tenant you want to attract. For example, you could provide superfast broadband if you let your property to students. Or perhaps a top-of-the-range security system for single tenants.
To add value to your property for years to come, invest in your kitchen appliances. They often have a longer guarantee and are less prone to faults and maintenance, so you’ll be doing yourself another favour.
2. Furnish the property
A tricky decision all landlords have to make is whether their property should be furnished or unfurnished. If you want to add value, opt for furnishings. Our research revealed the top cities where landlords can make the most money if they furnish their property, with London and Bristol coming out on top.
Sourcing the right furniture for your property will be more time-consuming and cost you a bit more, but it’s a simple way to add value. People may be exclusively hunting for a furnished home so it could help you attract new tenants and let your property faster. Tenants from overseas, first-time renters and students are the typical audience you will appeal to with the addition of furniture. Your location may have an impact too; renters living in cities and commuter towns often prefer furnished homes.
Stick to the main pieces of furniture and leave the soft furnishings to the tenants. This allows them to make their own stamp and create a home for themselves, meaning they’re more likely to renew their tenancy! Choose furniture that is neutral and appeals to the mass market – bold, daring furniture could put some people off and it could become harder to sign on new tenants.
As long as your property isn’t a holiday home, you can claim tax relief on any costs you incur when disposing and replacing furnishings, appliances and kitchen equipment. So, you don’t need to worry about being out of pocket.
As you take on new tenants, you should make it clear in the tenancy agreement that you expect them to look after the furniture. However, accidents can happen so taking out landlord contents insurance will protect you if your possessions are damaged.
3. Think about the location
Research the rental market in the area and think about the main types of tenants living in your city or town. For example, if your property is close to a university there will be plenty of demand for student lettings. However, student loan constraints and these tenants’ budgets mean that your yield could be low.
Our research revealed the best UK cities for student landlords to make a profit included London whereas Derby, Durham and Sheffield have the lowest average rent prices for students.
If you already have a property in one of these areas, try and think outside the box and target tenants that can afford to spend more on their rent. In this case, you could target lecturers or postgraduate students that are looking for something more upmarket. And the more luxury you can add to your property, the higher you can charge.
4. Keep the property in a good condition
Each time a tenant moves out, you should expect to see some fair wear and tear. This refers to smaller-scale, gradual damages that naturally happen from living in a property. To keep your property in top condition, you should carry out some basic tasks before letting it out again.
Hire professional cleaners to give the property a deep clean, repaint walls with scuff marks and replace any carpets that are worn down. Your clean and fresh property will make a great impression when prospective tenants come to viewings and makes people more inclined to look after the home and maintain the good condition.
Just like the furniture, it’s recommended that you choose neutral colours and designs. This will appeal to the masses and a blank canvas will help people envisage their own possessions in the space. When weighing up carpet or laminate flooring, consider the amount of traffic each room will get. A hallway is better suited to laminate whereas you can splash out on plush carpet for the master bedroom.
5. Spruce up the garden
A well-landscaped, easy-to-maintain garden can set your property apart from the competition and increase your rental value. Although families are more likely to place importance on the garden when viewing properties, who doesn’t love some great green space to relax and entertain?
Adding a decking area to segment the space is a simple touch that can add value. Plant climbers such as clematis and roses to bring some colour to the garden; climbers can also screen more unsightly areas. You don’t need to spend a fortune and make sure to select shrubs that are easy to maintain.
Bear in mind that you should state who is responsible for looking after the garden in the tenancy agreement. More often than not, the landlord holds most responsibilities. If your budget stretches and you let out multiple properties, you could consider hiring a gardener.
6. Invest in the kitchen and bathroom
The kitchen and bathroom are the most important rooms in a rental property. You spend a lot of your time in these spaces so if they’re not up to scratch, tenants can easily be turned off. Add value to your rental property by investing in these areas.
If you have the space, fit a bathtub in the main bathroom as this makes it easier to attract families and increase the value of the property. Extra details such as a shower screen rather than a curtain and a high water pressure mean your property will tick tenants’ boxes.
The kitchen is the heart of the home, so you need to make sure it has the wow factor, so opt for more expensive appliances and quality worktops. Hardwearing worktops are less likely to be damaged and it’s clear to see the value of stone over laminate. Rather than replacing all the units, tidy them up with a lick of paint and new handles – and it will look like a completely upgraded kitchen!
7. Protect your property with landlord insurance
After revamping your property to increase its value, you need to make sure you’ve protected your investment! Take out landlord insurance to cover yourself against fire, theft, flood, malicious damage and more.
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