If you’re looking to invest in residential rental real estate, there are so many things you can do to increase your monthly yield. These things may not necessarily cost you much more money, but they could dramatically increase the amount of money you could make. Residential real estate is a great investment option that should be considered, as it is a relatively safe market that will always be in demand. So, read on to find out how to make your rental property as profitable as possible!
Consider The Demographic You Want To Target
Before you start looking for a rental property, it is essential that you clearly identify your target audience. You have so many options, including students, couples, families and young professionals to name a few, all of which bring different benefits and difficulties. For example, you will make more money with a student house but the upkeep and tenant turnover will be more demanding.
Consider the benefits and drawbacks of each demographic and make your decision. When you think about exactly what your potential tenants will be wanting throughout the entire process, you are much more likely to create a property that will be highly suitable.
Choose a Great Location
Now that you know whom you will be targeting, it will be much easier for you to choose your location. For students, go for a large terraced house in the suburbs near to a University campus. To target young professionals, city center units close to amenities and public transportation are the best option. For a family, a semi-detached house with plenty of outdoor space and good school districts would be your focus. Each demographic would look for something different, so consider exactly what their wants and needs would be and base your location decision on that. Areas with lots of amenities and a low crime rate will draw in any potential tenant, and the more appealing the area is, the more monthly rent you can charge. A larger upfront investment for a great location will definitely benefit you in the long run.
Keep Things Neutral
When renovating or decorating, no matter who your audience is, the best thing you can do is have a consistent neutral color palette throughout the property. If all of the walls and floors are mismatched, most potential renters will be put off, as it will be difficult to make the space their own. Having clean, bright walls will make any room feel much lighter and bigger. Also, when paired with a nice wooden floor, it will bring warmth to the room. Try to keep things consistent and simple throughout the property, as it will look much more appealing to potential renters.
Make It Feel Homey For Viewings
Many tenants feel concerned that when they move into a property, it won’t feel like they’re at home, as minimal changes are usually allowed. So, the best thing to do is to go out of your way to add a few finishing touches that will make the property feel homey for when people come to view it.
If you’re targeting a family, have a toy area in the corner of the living room, some cute baby washcloths in the bathroom, and some family portraits on the walls. These small touches that you could borrow from family or friends can make a huge difference when it comes to drawing in tenants. If there is competition over the property, a tenant may be willing to pay above the asking price, so taking time to make the property as appealing as possible could increase your profits.
Consider Furnishing The Property
A furnished rental property is a great option for many people and can increase your monthly yield. When taking photos of the property, having furniture will help people to picture themselves living there. Having a property ready to move into is a massive selling point for plenty of tenants, so this is definitely something to consider, as it will enable you to increase your monthly rent quite substantially. Perhaps leave one upstairs room unfurnished, as everyone will have something different they might want to use that space for. It could be an office, nursery or home gym, so leaving it empty will give the tenants the opportunity to make it a practical space for their needs.
Summary
When you are investing in residential rental property, being considerate of the needs of the tenant is the best way to make it profitable. Thinking about what they might be looking for from the very beginning will help to ensure that it is the perfect property for your demographic, so that you can charge more in monthly rent. Taking time to implement a few touches that will make your property stand out from the competition will increase the demand, and therefore potential yield, dramatically.
We hope you found this blog post: How To Create A Profitable Rental Property, useful. For additional tips and advice, check out also: 8 Ways to Renovate Your Rental Home to Increase Rental Income blog post article. Additionally, we put together this newsletter to share with your friends and family.
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