Maximising the potential income from your rental property is important. In Edinburgh, the average rental yield (income divided by property value) is around 5%, and it takes something exceptional to exceed the norm. But there are a few things you can do to give it a boost.
To maximise your rental yield, take a look at the below tips before deciding what and where to buy…
Choose Your Area Carefully
Edinburgh is a relatively small city. However, there is a broad range of properties within the city centre, from New Town to Leith, Gorgie to Dalry and The Shore to Morningside and Bruntsfield. As you get closer to premium areas like Edinburgh New Town and Old Town, your margins will likely be slimmer because purchase prices are highest.
So look for opportunities where regeneration is already underway, as this will signal the up and coming locations. Areas like Leith, where the tramline is being extended, are where you may enjoy a greater return on your investment in the long term.
Keep an eye out for improvements being made to local facilities in locations where average rents are at the lower end. Property prices will likely be lower right now, but there is still tenant demand. As areas become more desirable, rents will rise, so check local plans and keep an eye on fluctuations in the local lettings market.
If you don’t know the area well, talk to a reputable agent who can offer impartial, informed advice on areas where rents are rising, and properties are in growing demand. Our team of property management professionals is always more than happy to advise if you are considering property investment in the Edinburgh area.
Profile Your Tenants
Before buying a property to let, consider the type of tenant, you want to attract and tailor your choice to their needs. Tenants will pay more for a perfect property that ticks every item on their wish list.
For example, young professional couples will want to be near good transport links and local bars and restaurants, whereas growing families require flexible space, gardens, and good schools.
Take time to carefully map out your prospective tenants’ needs and do your best to offer as many as possible.
Consider Renovation To Maximise Rental Yield
Buying a property that you can renovate is another way to maximise rental yield. A renovation project means increasing the time between purchase and the first rental, but the financial benefit can be significant in the longer term.
Increasing the number of bedrooms in a property is one of the best ways to improve the rent that you can charge. For example, consider converting a one-bedroom property with a living room and sizeable kitchen diner by creating an open-plan living/kitchen area and using the dining room as a second bedroom.
When finished to a high standard, this property type is likely to attract young professionals and command a higher rent than a one-bedroom property. Replacing tired bathrooms and kitchens with hi-spec modern alternatives can also increase the rent tenants are willing to pay.
Bigger projects that can add value include moving the kitchen to a box room to create a more spacious bedroom or building into the loft space. These works are more time-consuming and costly but offer a big return on investment. Our team at Clan Gordon has extensive experience managing these kinds of projects on behalf of Edinburgh landlords.
Redecoration Offers A Cost-Effective Way To Increase The Rental Value
Complete redecoration is generally a more financially viable way of improving a property and increasing the potential rental value. Tenants desire freshly decorated homes, so choose neutral colours throughout to provide a blank canvas and maximise appeal.
Quality properties are in high demand in Edinburgh. So create an as-new look to get yours noticed. Tenants are also more likely to look after a well-presented property and stay longer.
At Clan Gordon, we aim to improve standards in the private rental sector. As such, we only work with landlords who are willing to provide properties in good order or carry out the necessary work to upgrade their condition.
Provide Quality Furnishings
If you’re offering a furnished property, make sure you provide items of as-new quality that match and co-ordinate. This not only commands a higher monthly rent but means the furnishings are more likely to be looked after by the tenant, minimising wear and tear during the tenancy.
Providing quality furniture does not have to be expensive if you buy wisely. IKEA offers premium ranges at budget prices, and Clan Gordon can provide an expert handyman to collect and construct furniture for you, so letting never becomes a burden.
Looking to rent out your property in the city and the surrounding area, and need advice with purchasing, renovating or redecorating? Clan Gordon is consistently rated Edinburgh’s best letting agent by landlords and tenants. So schedule a call today for peace of mind your property is in safe hands.