There’s an art to getting the most out of your rental property. On the one hand, you want to be maximising the amount of rent you’re getting, while on the other hand, you’ll want to minimise your expenses.
Clearly there’s a balance to be struck here, but so long as you’re organised and considerate, it’s still perfectly possible to make the numbers work without turning into a cartoon slumlord.
- Before you show the property to prospective tenants, get it decorated (in white or neutral colours) and professionally cleaned. Obviously tenants will be willing to pay more for a place that looks smart and spotless, so focus on making a great first impression. Further down the line, periodic redecorations will be necessary to keep the place looking tip-top, and though you’ll need to budget for these, you can console yourself with the knowledge that the better your property looks, the greater the incentive for the tenants to keep it that way. As for the professional clean, it’ll be expensive, but it should only need to be done once. So long as you get a proper inspection completed and signed by the tenants when they move in, you can expect the property to be left in the same state of cleanliness when they move out. A bit of wear and tear is to be expected, but you're within your rights to charge any cleaning costs to the deposit if it's not up to scratch.
- Replace any appliances and fittings that are on their way out, focusing on the bathroom and kitchen (because prospective tenants will). Not only can this improve the rental value, but it’s also much cheaper to replace these things yourself, rather than waiting until they go completely and replacing them through your managing agents. Agencies tend to have their own preferred contractors, who usually provide a better level of service but almost always charge more than you'd pay on the high street.
- Shop around for agents. Percentages vary quite a bit, but more expensive agencies might get you better rents. Do your sums to make sure they're worth it. Letting fees from a decent agency will usually run at 5-10% of the annual rental value, which depending on your property can easily amount to thousands, and a few percent makes a significant difference. Better still, use Ezylet for a fraction of the cost. There are landlord packages starting from just £29.
- Beware of void time. An empty property is costing you money, which is something to keep in mind when letting (or re-letting) a property. If a prospective tenant offers you slightly less than the advertised rate, but is ready to move in sooner, then when you reckon up the reduced rent against the potential void time, you might find you're still better off accepting their offer. Of course, the best way to avoid an unoccupied property is to hold onto good tenants by treating them well and building a good relationship.
- Increase rents gradually. You're best off keeping your eye on the market and proposing small adjustments each year, rather than suddenly noticing after four or five years that you're charging way below market rate and jacking the rate up significantly. You might feel like you've been doing your tenants a favour by keeping the rent down for the preceding years, but you can guarantee they won't see it that way when you hit them with the bad news. At best, it could sour a good relationship, and at worst they might even find themselves having to move out. Switching tenants almost always has costs attached – like inspections and contract admin fees – quite apart from the risk of void time.