In today’s property market in London, it’s not easy to maintain a profitable property portfolio, but it can be done if you take the right steps towards maximising your rental yield.
It all starts before you even buy the property, as you need to select the right type of investment.
Location is crucial, in terms of the surrounding environment and transport links. You want to make sure there are transport links within a 10-15 minute walk from the property.
Finding a property with equal sized bedrooms is also a good idea. They appeal to students, sharers and families, the whole market. Whereas if there’s one smaller bedroom it can put people off. Even if the bedrooms are different sizes, it can often be worth refurbishing and moving the walls.
If you decide on refurbishment, it’s worth putting in high quality showers and bathrooms and you need a minimum of one bathroom for every three bedrooms, but ideally you want two bathrooms per 3-4 bedrooms.
It’s also well worth decorating between tenants, making sure all the kitchen appliances are working and if it smells of fresh paint during the viewings, that always helps.
On that note, we always advise spending the money on a cleaner, you don’t want to try and let your property while building work is being done or it’s dirty, but if you just spend a few hundred pounds on a professional clean, you’ll earn that back comfortably with the higher rental yield you’ll able to get for the property.
Next, you want to turn your attention to your agent.
As a landlord, you want to read your agent’s terms thoroughly and diligently before you sign them, making sure they don’t charge commissions on contractors, as this could make your costs up to 20% higher.
After you have signed up with an agent, it’s important to ensure they’re marketing your property properly.
Are they using as many platforms as possible, from Rightmove to Zoopla, On The Market and social media? Do they have high quality photos of your property, a floor plan and a virtual tour? Has the property been staged well?
The work doesn’t stop after the property has been let either. It’s essential that your agent is dealing with small maintenance quickly and efficiently to maintain a good relationship with the tenants.
You also want to make sure your agent is staying on top of the market and conducting regular rent reviews.
Then, when the agent has the evidence from the market that your property could be let for a higher price, if they have maintained a good relationship with the tenants, it should be easier to negotiate a rent increase.
Finally, ideally you want to make sure your agent is timing the market well. Over the summer, for example, demand in the London rental market tends to increase and so it’s a great time to let your property to ensure you are maximising the return on your investment.
Successfully managing a rental property in London requires strategic planning, quality enhancements, and diligent oversight. By selecting the right property, maintaining high standards, and partnering with a competent agent, landlords can maximise their rental yield and ensure sustained profitability.
So landlords, it's crucial to stay proactive with your property portfolio. Or, if you're pressed for time, partner with a dedicated agent, like Rocket, to handle it for you.
To discuss strategies for maximising your property yields in London with our founder, Ben Temple, book a consultation through this link.
