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What Will You Charge for Rent?
Getting the right rental price for your buy-to-let property is crucial. Too high and you won’t attract tenants, resulting in awful void periods; too low and you may not recoup your investment.
So, how do you know which price to set? Well, get ready to do some research in your property’s locale.
Check Out Prices of Highest and Lowest
Get a good sample of the properties that are similar to yours that have the cheapest rents in your locale, and those with the most expensive.
These should be properties almost identical to yours in spec ie two-bedroom apartment, furnished, in good state of repair etc. They shouldn’t include any areas you know are notorious by reputation and difficult to rent out. Nor should it contain properties which have, for instance, a granny flat included.
Next, find out where your property sits in the range. Do this by looking at several categories which can help you narrow the range:
What Is the Average Cost of Rent?
By this we are talking about how much square footage your property has. A survey that was carried out when you bought the property should be able to tell you this. The bigger your property, the more rent you can charge for it.
It’s well-known that property in London and the South East costs far more than anywhere else in the rest of the UK. And that’s the same for rental costs. However, looking more specifically the same type of property in a city or town will vary in costs depending on what amenities are nearby.
Families will love good schools and parks, while if your target rental market is young professionals then near the centre of town will be best. Looking to rent to students? Then the nearer their university – or beside a good bus route to it – is best.
Is your property modern and full-furnished? Or, is it modern but unfurnished. Depending on who your target market is, this will matter (families preferring unfurnished, for example). If the flat is furnished then generally you will be able to charge a higher rent for it.
Does your property have a log burner and wooden flooring throughout? Is there a balcony that tenants can sit out on in the summer? What about a roof terrace is it’s an apartment? All these things matter to the price because people will be willing to pay a bit more in rent for special features they value. Just remember to mention them in your initial property description.
Advertising on Rightmove and Zoopla
Some landlords use a pricing strategy where they advertise their rents as above what they are willing to take. In other words, they price them as more expensive. That’s because in a month’s time they can reduce the rent, making prospective tenants believe that they have a bargain.
That can work in some instances but when it comes to the big portals it’s the wrong strategy. Why? Well, because a new property is instantly flagged up on these sites, allowing more people to see it. That’s because it is emailed to those who have listed the area and type of property in their ‘desire’ lists.
A property where the rent has been reduced won’t be flagged up. It will remain far down the listings and won’t be freshly emailed out. This means anyone who finds it on the site and looked at it previously won’t bother with your property, since they’ve already noted how much was being charged initially.
It is far more important to get the rent right first time round and bag as many potential viewers as possible.
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