There’s no doubt that the process of finding tenants for your property has been made far easier thanks to the web, but are landlords using online resources effectively to maximise revenue off the back of increased demand?
When it comes to property, location is everything, but often that maxim is never fruitfully applied to the rental market where competition for properties in certain parts of UK ensures that even the most run-down rooms in less-than-desirable neighbourhoods command a battle for occupancy.
If you’re a landlord, why not try following these 3 simple steps to ensure that increased demand results in increased rent as a result?
Step 1: Understand the value that the local area brings to your property
No man is an island, wrote the poet John Donne, but equally, no property is either. Understanding how local amenities create demand is key to pricing your rent effectively.
Recent research from LSE suggests that a property in the close vicinity of a school rated Outstanding can be worth up to 8% more than those near to merely satisfactory schools. Schools, parks, leisure facilities, open spaces, great pubs and restaurants all act to push up the desirability of an area, and it’s only right that properties ticking all the boxes should command a premium. In fact, anecdotal evidence from Savills indicates that even the smallest things can have an impact: homes that have Waitrose as their local supermarket are typically worth 10% more than those with access to other brands.
ACTION: Identify all the potential selling points for the local area and try to assess the uplift in value that each one brings
Step 2: Prepare an information pack outlining the neighbourhood benefits
There’s no doubting that property particulars are important, but have you considered providing prospective tenants with an information pack about the local area? As well as being an excellent way to demostrate your utility and support as a potential landlord, it’s another great tool for helping tenants understand the triggers that are creating local demand for housing.
Don’t stop there though; use the information pack to highlight why there’s such interest in your property and why it might be worth paying more for ready access to a neighbourhood containing everything a tenant might need.
ACTION: Create or download information packs for your property to sell the benefits of the local area
Step 3: Understand the demographic demand of the area
Demographically, property values and household income used to be closely intertwined, but over time the link is becoming looser and looser, particularly in densely-populated urban areas. If you want to maximise rental income, it’s important to understand the demographics of those creating demand in the area – and to respond to that need with an appropriate rental price. High-income city workers might consider living in less affluent areas for reasons of convenience and accessibility, and in some instances that demand can allow landlords to increase rents above the local market average.
ACTION: Research the demographics of those moving into the area and pitch your pricing at the trend, not those already living there
Author: Barry Bridges is the Co-Founder of Property Detective; a powerful tool that helps landlords, buyers and tenants research more intelligently the local issues affecting a property. He writes about property research, data and due diligence on their blog: www.propertydetective.com/blog
Photo sources: flickr.com/photos/ingythewingy – flickr.com/photos/neshuma