As landlords, we have two streams of income: rental, and capital asset value. So how could you increase your capital asset value over the average market rate and get the benefit of a higher rental return in the mean time? Here are 6 ideas to maximise your rental return.
#1 Enlarge it
According to property portal, Rightmove, an extra bedroom will add 5% to the value of your home. From a renal perspective, we’ve seen increases of up to £100 per month.
The pandemic has fundamentally changed what people are looking for in their homes, and one of the things online searches are showing is that there are a higher number of searches for properties with more rooms. With studies showing that businesses are looking to carry flexible working forward even when the pandemic is over, adding an extra room certainly isn’t going to hurt.
Could you change the garage into another room? Is there convertible loft space? Have you thought about adding a garden room to create a separate office space? With no planning permission needed for under 30 sqm, or up to your boundary 15 sqm – that could be a viable option. It’s certainly worth a thought.
#2 Make simple conversion tweaks
Would the curb appeal be significantly improved by adding a stylish porch? Could you take down a wall in between the kitchen and the living room to create a light and airy open plan space? Is there a space under the stairs you could utilise for storage? If you’re thinking of updating the kitchen, are there any clever elements you can add to really make the most of the space?
If you spend a bit of time thinking about how a few quite simple changes could improve a tenant’s quality of life, you’ll be well on the way to maximise your rental return.
#3 Light it up
Sometimes the smallest changes have the biggest effect, it really is amazing the difference swapping a fluorescent tube to downlighters can make in a kitchen. Switching up the lighting (Did you see what we did there?!) is one, relatively inexpensive way of giving your property the ‘wow factor’.
So many properties still rely on the age-old lighting tactic of a main light pendant and a side lamp, but think about down lighters, pelmet lighting, energy efficient light fittings and adjustable lamps – you’ll really notice the difference.
As an additional note, make sure you don’t make the same mistake me and Matthew did once though. When choosing light fittings, make sure you get LED fitments that allow you to change the bulb easily without having to take up the floor or dismantle various other parts of your house!
Okay, so it isn’t quite as glamorous as gorgeous lighting, but have you got room to add an ensuite to the master bedroom? To make this viable and not too costly, the current plumbing needs to be near – ideal if the family bathroom is just next door.
Renters’ expectations for bathrooms, shower rooms, and cloakrooms have changed massively over the years, and an ensuite or a downstairs shower in the cloak room is a brilliant hook for any new renter.
If you do decide to go down this route, you’ll need to budget for new water supply and wastes, alterations to drains, and good mechanical ventilation.
#5 Change how it’s heated
New energy efficiency standards could be coming into play by 2025, when all new tenancies will need to have an energy rating of C or above. It would be an idea to start investigating alternatives now, to ensure your property will meet these requirements and avoid the potential future stress of scrabbling to meet the standard!
Before you even think about heating, it might be worth taking a look at the insulation. Remember when doing this that more insulation means you’ll need better ventilation – so check when the extractor was last changed.
Whatever heating system you use currently, whether powered by gas, oil, or electricity, the chances are more energy efficient models are now available. You might want to consider renewable energy sources like ground and air-source heat pumps, solar or wind energy, or be thinking about installing underfloor heating.
#6 Re-landscape the garden
It’s surprising the difference a landscaped garden can make. When you’re renting a property, you’re not just renting a home, you’re selling a lifestyle. If someone can view your property and envisage themselves spending sunny evenings in the garden with a cocktail in hand, then you are half way there.
With the pandemic as well, people are looking for outdoor spaces to become an extension of the indoors – especially as restrictions ease and they are able to spend time with friends and family in the garden.
Here are a couple of lovely examples we’ve worked with recently:
While all of these ideas will cost money, it’s money that you’ll get back in increased capital asset growth, and your tenant, who is your customer, will be happy to pay for a better product than the norm. It’s a win/ win for everyone!
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