Boosting your rental yields
As a company that specialises in both real estate sales and property management, we as agents are often asked about the best ways to maximise return on an investment property.
Whilst some things such as improving the property might seem obvious, there are other tips and tricks which can help you end up with a better bottom line. Check out our recommendations for boosting your rental yield with these pro-active approaches:
- Listen to your tenants – comfort is key for any home, and often tenants can identify one or two things which would make a real difference to their time in the property. If they’re asking for a heat pump, consider it carefully and negotiate with them on a rental increase to cover the cost of the heat pump – it’s allowing you to get better returns whilst adding extra appeal to the home when the time comes to sell or find new tenants
- Consider other tenant options – for example how about tenants with pets? Fencing your property and adding a cat or dog door can hugely widen the appeal of your asset, creating competition and demand amongst tenants, increasing the market rental potential
- Renovate – whilst it can be hard on tenants to increase rent out of the blue, giving justification for it such as an interior repaint, new carpet or kitchen renovation, can make them feel they are receiving value for the added cost. Adding a dishwasher has a one-off cost but makes a property more appealing for future tenants and allows you to charge the current ones a little more
- Furnish – in the right market, landlords can boost cash flow by offering a property fully furnished. Furnishing a home can add a significant amount to the weekly rent
- Add an extra bedroom – not as hard as it sounds! Often a room can be very easily re-purposed, for example changing a dining room into a bedroom can increase both yield and property value
- But wait, there’s more – can you add value to tenants in other ways – for example including the internet in their rent?
- See a mortgage broker – often the biggest increase in yield comes from minimising your expenses. As the mortgage is the single biggest cost for most investors, look at options to change or negotiate with banks when a fixed term is up. Mortgage brokers can advise on who’s offering the best deals, sometimes with cash sweeteners for the move
- Talk to your accountant – it’s always a good idea to annually review your status with your accountant – there may be investor tax benefits that you’re missing out on