At our property investment seminars, we often talk about setting the right rental rate. Obviously, as a landlord, you’ll want to charge as high a rent as realistically possible, to maximise profits. However, if you charge over the odds, you’ll end up putting tenants off your property – which in financial terms is a disaster.
If you’re looking for buy-to-let property for sale, and you want to know what rates to charge, here is a guide to help you.
Property Seminar Tips – Factors that Affect Rental Prices
Wherever there’s excessive demand, there’s fierce competition. And that means tenants willing to pay over the odds to secure the property they want. That’s why it’s a good idea to invest in property in a location that’s popular with renters, such as London, Manchester, Sheffield, Glasgow or Leeds, for example.
If the average monthly wage in the area is £1,800, your prospective tenants aren’t going to take too kindly to you charging £1,400 per month, unless you’re deliberately targeting the upper end of the market. Remember, your tenants need enough money to live on too – and if it’s too expensive, they’ll simply look for a place that’s more reasonably priced.
Certain amenities can really push rental rates up. Even a local shop is considered an attractive thing to have close by, and the same applies for pubs, restaurants, supermarkets and entertainment venues (like a football ground or cinema, for example).
Certain tenant demographics (such as young professionals and students) rely heavily on public transport to get around. If the property is close to a train station or bus stop, this is likely to push the average rental rates up.
Quality of accommodation
It goes without saying that if you’re offering a better standard of living in your buy-to-let property for sale, you’ll be able to charge a higher rent. Just make sure that it’s targeted to the area; as there’s no use installing all the latest hi-tech gadgets and top-of-the range appliances if the average property on the local market is aimed at lower paying tenants.
Schools / universities
Obviously, if you’re targeting students, then the closer the house is to the university campus, the higher the rental rates will be. If you’re targeting family renters, you’ll need to do some research into the local schools. If a neighbouring school is awarded an Outstanding at Ofsted, this usually pushes demand up in the surrounding area; which means higher rental rates.
Certain property features are sought-after by tenants – such as driveway parking and a garden. If you invest in a property with any extra features like this, you should be able to increase the rental rate accordingly.
The Buy2Let Shop
At our property investment seminars, we discuss a range of topics relating to investing in UK property and becoming a landlord. If you’d like to find out more about attending any of our free property seminars, or want to learn more about our services, simply visit The Buy2Let Shop website today.