New homes

The essential guide to maximising your rental yield

Posted April 5th 2024
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For landlords with investment properties, one of the most important measures of success is having a high rental yield. In this blog post, we will talk you through what rental yield is and how your property can maximise its yield.

What is rental yield?

In simple terms, rental yield is a property's annual rental income divided by the total investment you have made as a landlord. It's expressed as a percentage and is one of the ways you can measure the profitability of your rental property. It can be measured in two ways:

Gross rental yield: This is the rental income expressed as a percentage of the property's current value. It does not account for any expenses.

Net rental yield: This considers all costs associated with maintaining and running the property, offering a more accurate reflection of the return.

What is a good rental yield?

What is considered a 'good' rental yield can depend on a lot of factors, varying based on property size, price and location. Generally, rental yields between 5% and 9% are considered strong. If you're unsure, local property management agencies such as our expert team here at Thomas Morris would be able to tell you if you're getting a profitable yield.

Strategies to boost your rental yield

There are a number of things you can do as a landlord to enhance your property's rental yield. These include:

Improve your property's energy efficiency

When viewing properties, there are a number of things renters will be on the look out for, and one of the most important is its energy efficiency rating. There are a number of things you can do to keep your property's energy efficiency high.

Investing in energy-efficient appliances, good insulation, and green technologies not only attracts environmentally-conscious tenants but can also significantly lower long-term costs from things such as damp and mould. This means the net yield potentially increases without raising the rental price.

Look for long-term tenants

High turnover rates are costly, and they can eat into your rental yield. If you can, try and secure stable, long-term tenants who will treat the property as their own. Build a good relationship with your tenants and encourage longevity by making sure maintenance issues are kept on top of and the property remains in good condition.

Refurbish your property

A fresh coat of paint, modern fixtures, and a well-maintained interior can command a higher rental price. This doesn't mean a complete overhaul. Sometimes small, strategic tweaks can elevate the property's appeal.

Offer furnishings and appliances

Convenience is a major draw for many tenants, and many long-term renters won't have white goods or even furniture. Offering furnishings and appliances such as sofas and washing machines can attract a wider base of renters and means you can charge a higher rental price.

Invest in your outdoor space

A property with a well-kept garden or outdoor area can often attract higher rents. This added space can be particularly attractive in urban areas where tenants often lack access to private green areas.
 

Property maintenance and advice on rental yield are some of the things our Property Management team can help you with as part of our Fully Managed letting service. Get in touch with our team today for more information.‚Äč