5 ways to increase your rental yield
A huge consideration for any property investor is wealth creating. As such increasing your rental yield constitutes a critical portion of wealth creation. Everything from; property maintenance, rental analysis, and tenant selection, encourage rental yield. Also, when you offer a point of difference in your rental property you will attract more tenants. So regardless of whether you target a niche market or add a few extras, there are many ways you can boost your rental yield. So here’s how you can do it right, see the benefits and ultimately increase your rental yield.
What is rental yield?
Let us start by examining what constitutes rental yield. In laymen’s terms, rental yield is an appraisal of the income your property makes annually as a percentage of that property’s value. Firstly, gross yield is scrutinized before the addition of holding expenses. These expenses include; mortgage interest, bills, as well as property management fees. Secondly, the net yield is the figure you remain with after you attach holding fees.
What is a good yield?
Experts usually advise that at least 5 percent yield, is a decent yield. However, your yield is directly impacted by market fluctuations. Lastly, remember to balance out your yield with capital growth.
Ways to increase your rental yield
This is where your property manager will earn their keep. After all, a competent manager is always on the lookout for ways to increase your rental yield. Here are a few ideas:
1. Street appeal
You only get one chance to make a good first impression. The same is true for rental properties as well. Spend some time working on the front part of your property to make it more appealing. In addition, you should improve the landscaping, clean and clear the driveway. Furthermore, you can clear paths, as well as paint the fence/ wall barrier.
The upgrade works you will undertake are aimed at improving the aesthetics of the property so as to increase the rent. Be certain not to overcapitalise on any renovation. Some simple, clever, and effective ideas are:
- Firstly, replacing bathroom vanities and mirrors.
- Secondly, respraying bathroom tiles.
- Also, consider introducing floorboards instead of carpets.
- In addition, change your kitchen cupboards and handles.
- Lastly, you can modernise faucets, fixtures, and fittings.
3. Throw in some extras
You can also consider a few minor additions that will allow you to keep your tenants happy and increase rentals. After all, everyone likes to receive a little something extra. Examples of minor additions that can ultimately lead to increased yields include a washing machine, a dishwasher and the addition of a laundry area.
4. Regular inspections
One of the most important things that you can do as an investment property owner is to carry out regular inspections. I highly recommend that you carry out a thorough inspection of the property at the time of procurement. Subsequently, carry out another inspection after three months and every six months after that. The idea behind all these inspections is to identify any issues early before they manifest into big and expensive problems. After all, the more money you spend on repairs, the less your net yield becomes.
5. Add more space
A lot of people do not understand the value of adding more space to their property. A property with more space is bound to fetch more than a property with less space. For example, a three-bedroom house fetches more rental income than a two bedroom property. As such, if your house has some dead space, then you should consider converting it into another bedroom. In addition, this will increase both your yield as well as your property value.