Increasing the rental value of your property is the most effective way to get the most out of your buy-to-let investment, especially in competitive rental markets.
You can increase rental property value with relatively little outlay, and a small initial investment can pay dividends further down the line.
First, however, it’s important to understand what we mean when we talk about rental value.
Rental yield is one of the most important figures for any landlord. It refers to the rent your property can generate as a proportion of its value.
Rental yield will be a key consideration at every stage of your investment. You’ll also need to think about realistic rental income versus your mortgage payments; most lenders will require you to demonstrate that you can secure at least 125 per cent of your repayments in rental income.
If you're wondering how to work out your rental property's value, the rental property value calculator, also known as the rental yield calculator, is as follows:
((Weekly rent x 52) ÷ property value) x 100
So, you’ve worked out the current rental value of your property – now let’s think about some ways to increase it.
There are some very simple things you can do to increase the value of a rental property, perhaps the most important of which is to conduct regular checks, maintenance, and between-tenancy cleaning.
Hire a carpet cleaner for the day, polish fixtures and fittings, and make sure that appliances are working properly. Some simple cosmetic fixes can increase rental value with little to no outlay on your part.
Check out our top rental propety maintenance tips for landlords for more information.
There are two key pain points in any rental property: the kitchen and the bathroom. By spending a bit of time on these areas you can increase potential rents without having to carry out major work – the only thing it needs is a bit of elbow grease.
We’ve compiled a series of video guides to help you look after your rental property, several of which concentrate on the kitchen and bathroom.
They show you how to make the most of these rooms with the minimum of fuss. Read and watch our step-by-step guide to cleaning a bathroom, and our guide to cleaning a kitchen professionally – the advice comes from professional cleaner, and Simply Business customer, Harriet.
It’s tempting to decorate a rental property as you would your own home – you have an idea of how you want it to look, and what would make you comfortable. However, it’s important to remember that it’s not you who’ll be living in it.
Instead, you should treat it more as a blank canvas. Remember that it needs to appeal to the broadest range of people possible. This principle should be considered from the very first stages of fitting out a new property.
When you’re decorating for the first time, you should consider going for neutral colours and furniture, rather than statement pieces that appeal to you but which might put off prospective tenants.
A garden, however small, can be a great asset for increasing the rental value of a property, but it needs to be properly looked after.
Make sure that you tend to any green space between tenancies; you may consider hiring a gardener to help you with this, depending on the size and nature of the space.
Importantly, you should also make sure that you are clear with tenants about who takes responsibility for the garden during the tenancy itself. This should also be written into your tenancy agreements.
Finally, if your property is in a particularly competitive rental market, you might consider adding some special extras to attract tenants who are willing and able to spend a bit more.
For example, you could invest in top spec kitchen appliances, and you might consider installing a security system. You can achieve a luxury feel for a relatively modest sum, and this investment can pay dividends in the medium-term.
What's your top tip for adding value to a rental property? Let us know below.
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