Renting out property can be a fantastic way to supplement your income and help build your pension pot. But with rising interest rates, many landlords are starting to feel the pinch and are finding that the expenses are greater than the rent they are receiving.
In this short article, we'll look at 5 ways you can increase your rental yield despite the current climate. We'll start to explore strategies such as setting competitive rent prices, adding value, renting to different types of tenants and how to cut costs. By following these tips and tricks, you'll be able to ensure that you're making the most of your rental property.
Market Rent - Amazingly but true. Many landlords, fail to get the market rent from their tenants. Preferring to make a loss each month and take the easy route. They do it because of a fear of upsetting or losing a reliable tenant, professional landlords raise the rent a little each year. It is a straightforward process and can be done by either serving a Section 13 notice or by offering the tenants a new fixed-term contract.
Adding Value - If your property is vacant and you are searching for new tenants. A few home improvements can make a huge difference to the rental value of your property. Replacing the entire kitchen or a bathroom can be costly. But spending a few quid decorating or on new carpets can help make the place feel like a home, while tidying up the garden will add instant kerb appeal. Also an updated Energy Efficiency rating could make your property more appealing to higher paying tenants.
Different types of tenancies Diversify your rental income. Do you live in a town where there is a demand for holiday lets or serviced accommodation ? Short term fully furnished tenancies could also be of interest for tenants wanting a place to rent, whilst they sort out longer term plans. Can you rent your property to tenants with multi pets as they will normally struggle to find suitable accommodation and may pay a premium These sort of tenants pay a premium for the convenience of just turning up to a ready made home.
Mortgages Last week interest rates went up another 0.5% adding £41.67pcm per £100,000 to any landlord on a variable rate mortgage. Check with your broker to see if a better deal is available. If you are really out of pocket, consider changing to an interest only deal.
Cutting costs Cutting costs is a great way to improve a business's bottom line. It is no different in the BTL model Did you check to see if you could renegotiate the buildings insurance or scrutinising the management company statements to see if savings can be made on the annual service charges. Talk to an accountant and see if you can reduce your tax burden, make sure you are claiming all of the deductions and allowances available
If you would like to discuss any of the above or want some help in getting some of the above actioned. Please get in touch.