Fri 21 Sep 2018 View all news articles
The majority of renters want to move into an unfurnished property, but relatively few landlords offer homes without furniture. So, if you’re a landlord looking to attract tenants, how can you make your buy-to-let stand out?
A new study by the price comparison website GoCompare surveyed renters on their priorities when looking at homes, and the findings might surprise some landlords.
Here, we take a look at what renters are looking for, and offer advice on you can find the right person for your property and avoid costly void periods.
What do tenants want?
GoCompare surveyed 1,000 tenants about what they look for when renting a property, before comparing these features with those available in 1,546 homes currently listed on the property portal Rightmove.
The research found that landlords are underestimating how many tenants want to live in unfurnished properties, with six in ten (60%) wanting an empty home but just 14% of properties being offered unfurnished.
There were also signs that modern renters want access or close proximity to leisure facilities. One in five (18%) of tenants said access to a gym/pool is important to them.
The research suggests some the traditional attractions are now being overlooked by tenants, with just 15.78% looking for a home with an en-suite, as shown in the table below.
|Property Features||% of tenants who say feature is 'important'||% of homes with feature||Difference|
|Close to good schools||23.16%||15.33%||7.83%|
|Has a parking space||22.72%||11.00%||11.72%|
|Has a garden/roof terrace||22.64%||44.63%||-21.99%|
|Has access to a gym/pool||18.28%||13.00%||5.28%|
|In an attractive area||17.00%||39.92%||-22.92%|
|Close to work/university hubs||16.88%||58.34%||-41.46%|
|Offers a cleaning service||16.21%||3.04%||13.17%|
|Has an en-suite||15.78%||20.12%||-4.34%|
While the sample of 1,000 tenants surveyed by GoCompare is relatively small and means you shouldn’t necessarily take these findings as gospel, they do highlight that the priorities of modern renters are perhaps shifting.
Finding the right tenant
To find the best possible tenants, it’s worth considering what your property offers and how you can boost its appeal.
Then again, it’s also important to make sure you find the right people to safeguard your valuable investment. If you use a letting agent, they’ll find and vet tenants for you – but if you’re going it alone, you’ll have to make the decision yourself.
1. Think about property type
Ultimately, you’ll attract better tenants if you offer a property that has features which are in high demand.
Think about the type of household that might be looking to move into your home – a one-bedroom flat may be more suitable for a couple, while a three-bedroom home is likely to attract families with children – and what is most desirable to those tenants.
2. Set the rent at a reasonable level
You might want to earn as much as possible from rent, but tenants are likely to shop before making a decision. If your property is significantly more expensive than comparable homes, without offering anything better, tenants are likely to pass you by.
Take advice from lettings agents, and do you own research into how much similar properties are advertised for and how long it takes to rent them out.
3. Choose the right amount of security deposit
Some tenants are asked to pay six weeks of rent upfront as a deposit, while others only pay a month initially.
While a bigger deposit offers you greater recourse if the tenant damages your home, a large initial outlay could price some prospective tenants out.
If your property is standing empty for a long time, keep in mind that void periods may cost you more overall than dropping the rent by a small margin.
4. Present the home in the best light
You don’t need to refurbish the whole property every time a tenancy ends – but a lick of paint or steam-cleaned carpets can make it seem more appealing.
If your property is furnished, it’s also worth considering what state the furniture is in and whether anything needs replacing – which may qualify for the new wear and tear allowance.
5. Do thorough background checks
It’s vital to take the time to ensure you’re getting a trustworthy tenant.
You’ll need to have any prospective tenants undertake credit checks, and ask for employer and landlord references.
In theory you can do these checks yourself, but many landlords appoint managing agents to process them on their behalf.
How to invest in the right property
Maximising your appeal to tenants starts with buying the right property.
The following tips can help you choose the right investment property.
1. Research the local property market
Look at listings on portals such as Rightmove and Zoopla to get a better grasp of what’s currently available, and how your property compares.
Local letting agents will be able to tell you about trends in the market and advise on which houses are easiest to let and whether any types of property are in short supply.
2. Decide between old and new
New-build homes may be appealing, as you could benefit from lower maintenance bills and in some cases achieve a higher rental price from tenants.
The trade-off, however, can be a significantly higher initial outlay.
Before going for a brand new house, weigh up rental yields with prospective capital growth. It’s also worth considering the degree of development in your area, as too many new homes may result in lower demand from buyers and renters.
3. Don’t blow your budget
The profit margins on property investment are stretched, with some properties no longer achieving the yields they once did.
This means you should calculate and recalculate your projected incomes and outgoings, set a budget and stick to it.
If you’re buying a property to let out, you won’t have an onward chain – this may be worth emphasising as part of your offers, as it’s less likely that you’ll hold up the sale.
4. Think with your head
Don’t get carried away with one specific property. While it might tick all the boxes, overpaying can make it hard to maintain rental yields, and may limit the achievable capital growth. Make a shortlist of properties and view them several times before rushing in.
Buy-to-let mortgage advice
If you’re considering adding to or refinancing your portfolio, it can help to get advice from a mortgage broker. To arrange a free consultation with our recommended mortgage advisor, please click here.
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