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Helpful Advice

Ten Ways to Maximise Rental Yields

Ten Ways to Maximise Rental Yields

By Peter Barry

If you’re thinking of dipping a toe into the buy-to-let market, there are certain steps you can take to ensure you get the best return on your investment, right from the start. Here’s our quick guide to maximising your rental yields.

1. Splash the cash
Don’t fall into the trap of buying a cheap property to save money. It can often pay to invest more in a decent property in a decent area, in order to get better tenants with more disposable income: people are prepared to pay a premium for key London postcodes. As the old saying goes, “you need to speculate to accumulate”.

2. Mortgage research

With more buy-to-let products now surfacing, there’s more choice available. Do your research, as even small differentials in interest percentages could have a big impact on your profit margins.

3. Don’t fall in love with the property
It’s an investment, not your own forever home. By remaining emotionally detached about your property acquisitions, you’ll get a much better idea of how they can best perform as investments.

4. Vet your tenants
Finding your own tenants might be cheaper than using an estate agent, but you run the risk of problems later on. Use an established agency that will do financial checks, take up references, secure the deposit and arrange tenancy agreements.

5. Update the interior
Freshly painted white walls and the smell of new carpet can lure tenants into signing on the dotted line. Simple décor won’t cost a fortune but it will make your property stand out from the crowd and ensure you get the maximum rent.

6. Renovation works
You could go one step further than a coat of paint: an extra bathroom or toilet, a new kitchen, or an upgraded bathroom could put your property into the next band on the rental ladder – time and money spent now could pay off in the long term.

7. Be on call
A good landlord attracts and keeps good tenants – if you’re lucky enough to have reliable tenants who pay their rent on time and look after the property, treat them well in return. That means making repairs as quickly as possible and being on hand to answer queries.

8. Keep up with inflation

Make an annual review of the rental price and increase it accordingly. That’s not to say you automatically raise the rent by hundreds of pounds as soon as the New Year comes around but it’s only reasonable to tie your rental prices in with the local average.

9. Keep it occupied
Void periods are one of the fastest ways to see your money go down the drain. Make sure you build up a good rapport with agencies and tenants to minimise the periods of time when your property is vacant.

10. In it for the long term

Property investment is a long-term financial commitment. Eventually you should see your property rise in value but the current market means this simply won’t happen overnight. Be patient, be a good landlord and this could be the best investment of your life.