Every landlord wants to know how to charge more rent for their property. Sadly, it’s not as simple as just raising the price – supply and demand dictate there is always a ceiling. You must work out if you have reached that ceiling, and if so, what you can do to improve the property and, therefore, rental value.
In this guide, we reveal how to assess your current rental value and then show you the steps you can take to increase it.
Research the Local Market
The first thing is to get a true assessment of your current rent potential. If you have not recently assessed the market, you might find you have fallen below the market rate and can simply raise your rent with no improvements.
But how can you assess your true rental value?
For new landlords or those with property in an unfamiliar area, you will need to conduct research to find out how much other landlords are charging. Make sure you compare similar properties – same house size, number of bedrooms, and condition, in the same area.
The easiest place to do this is on the main property portals, such as Rightmove, Zoopla or OpenRent. There are several things to look for. Not only how much landlords are asking but also how long those properties have been on the market. If they’ve been online for months, it’s a sure indication the rental asking price is too high.
You can add an extension to your Chrome browser called Property Log that adds information into Rightmove listings. You can see if the asking price has dropped, when and by how much.
Speak with estate agents/other landlords
If you know a friendly estate agent, then ask them about rental values in the area. Even if you don’t know an agent, call their bluff by suggesting you are thinking of using a local lettings agent – they will probably try to help you. Speak with any other landlords you know in the area to get their feel for rental pricing.
Use Our Rent Calculator
We think the best way to find out the appropriate rent for your property is to our rent calculator.
Why are Some Properties Getting Higher Rent?
You may discover that some properties ask and achieve higher rents despite apparently being similar to your own. Once you investigate a little further, however, there is usually a reason why this is the case. It might be down to something as simple as having a bigger garden or off-road parking. Perhaps it is kerb appeal – the property might look tidier and in better condition from the street.
In many cases, the disparity will be down to the layout within the property, where the landlord has opened space up or refurbished it in some way. Little changes have big effects on rent.
For example, a difference of a few square metres’ space in a third bedroom can be the difference between being able to let to affluent professional sharers, who all expect a double bedroom, versus families with less money to spend on rent and who don’t mind a child having a single bed.
What Common Improvements Add Rental Value?
You now reach a point where mathematics will tell you if it’s worth improving your rental property to achieve a higher rent. You must consider how much it will cost you to make the improvements, whether that work adds value to the property in the long term – and critically, whether it actually allows you to ask for a higher rent.
Your individual circumstances will dictate which of these factors are most important to you. For example, if you pay for work that will add a little rental value but will not shift the future sale value to any extent, will you lose out in the long run?
Again, you can speak to local estate agents who can advise on whether your improvements will add rent and value to properties like yours.
Here are some common improvements to consider when working out how to charge more rent. See our guide to finding good tradespeople to help you.
For properties over a certain size, en-suite bathrooms off the master bedroom become attractive. There is little point in doing this in a small terrace, where the main bedroom is too small to accommodate a bath or shower room.
If you plump for an en-suite, make sure you give it a good finish to make it appear luxurious and extra special for a future tenant.
Take a walk up and down the street to see if any neighbouring properties have opened up the loft space. This is a great way to add an extra bedroom and even living space. A loft conversion will undoubtedly add value to your property, too.
New kitchen and family bathroom
When people are looking to buy or rent out a home, the key rooms when they go on a viewing (remember, OpenRent can source your tenants) are the kitchen and the bathroom. These are high-traffic areas that can ooze appeal or look dreadful, outdated and cluttered. Unlike bedrooms and living rooms, which are mainly defined by their furniture, bathrooms and kitchens have fixtures which will be inherited by the tenants, meaning they matter more.
In the kitchen, you may not need to strip back and start again. But if the space works well, you might get away with refreshing what you have. Replace the unit doors, hinges and handles, repaint, add new tiles and buy new appliances like a fitted oven and extractor hood.
Opening up reception rooms
Smaller terraced properties are often built with two small reception rooms. Often, knocking these into one ample family space is more appealing and lets tenants be more creative with how they use the area. Like all significant work, check if any planning permission needs to be sorted out first and what building regulations will need signing off.
Adding an extension
Perhaps the most costly property improvement is an extension. After working out how much an extension would cost, you must be realistic about whether you would get that money back when you come to sell. For example, in a terraced home, adding lots more living space might be fine for the rental price, but you may never be able to get a return on your money when you come to sell.
An extension need not be a huge two-storey addition. You might consider a single-storey extension at the rear, meaning you can create an enlarged kitchen diner, plus decking or some other attractive outdoor feature.
With the right research and execution, you can significantly raise the rental value of your property. Be sure to take your time, seek advice and don’t be tempted to cut corners when it comes to carrying out work. If all goes to plan, you can charge more rent for your property and increase its value, perhaps by much more than you spent.