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Five ways BTL landlords can achieve higher yields

May 19, 2021

Buy-to-let is booming in Britain. Research shows that in 2020, the number of properties sold by landlords in the UK was 131,900, the lowest sell-off since 2013, when 105,830 properties were sold.

For BTL investors, maximising the yield of their investment is, of course, a primary objective. There are several steps landlords can take to help nurture a maximum monthly return.

If you are a landlord wanting to expand your portfolio or are thinking about entering the rental sector for the first time, check out Auction House London’s five ways BTL landlords can achieve higher yields.

Choose a location where rental demand is high  

Some areas have much greater demand for rental property than others. Regions where demand for homes to rent is high, typically charge more in rent than areas where demand is lower.

Cities, generally speaking, cost more to rent property in compared to less populated areas, because job prospects are greater, and subsequently urbanised areas attract a greater number of workers.

To maximise rental yield, consider investing in places where demand for tenancies is high, such as bustling cities where jobs are more abundant.

Think about tenant profile

Certain types of tenants typically pay more for rental homes than other types of tenants. For example, professionals tend to pay more in rent than students, or DSS tenants. When investing in BTL property you should therefore think about the type of tenant profile you want to attract.

Consider the property spec

By the same token, properties of a high spec generate more in income than those of a lower spec. Buying a property that requires some renovation or modernisation can be a cost-effective way to maximise rental yield, as the initial investment can be lower than purchasing a property of a high spec.

Updating the kitchen, bathroom or adding another bedroom will make the home more attractive to prospective tenants, meaning you can ask maximum monthly rent, but you paid less when you bought the home, thereby raising rental yield.

Select an area where the price of property is lower

Property in capital cities like London might be gold-dust to rent out but the cost to buy the property is much more than other cities. To maximise rental yield, you may want to think about investing in cities where property isn’t as costly.

Northern cities like Manchester, Leeds and Liverpool are proving popular among investors, emerging as hotspots for high rental yields.

Shop around for the best mortgage deals

BTL mortgage deals remain low. The expenses you pay on your investment do of course directly impact your yield. It is therefore within every landlord’s interest to shop around and get the best BTL mortgage deal they can find.

Purchasing buy-to-let property at auction

Our final tip… If you are planning on capitalising on this comparatively stable investment in forthcoming months, auction can be a great way to find a lucrative property to let out, snap it up for a bargain price, and maximise your monthly return.

Check out the fabulous listings we have available in our forthcoming property auction with remote bidding only. You never know, you might find the buy-to-let investment you are looking for.

 

Written by Andrew Binstock

May 19, 2021

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