Buy-to-let investors regularly ask me how to increase the value of their property portfolios. Whether this is through increasing the marketable sales value as a stand-alone property or by raising the investment value through higher rental returns.
Several factors influence this, so let's examine a few key aspects...
Finding property where you can add value
This is potentially the hardest part in an active market; there is so much competition from other buy-to-let investors that opportunities are few and far between. This is where one needs to be creative and find properties that perhaps on the surface don't look as great but can be made great through purchasing at significantly reduced prices. Consider properties that have been on the market far longer than average for the current market conditions.
The other option is to look at properties where with a little bit of work, your potential rental pool could be significantly increased. Think about adding in another bathroom and renting to two professionals sharing rather than a couple.
Adding value to your existing properties
It is always important to look where you can add value inside of your portfolio. I always recommend when tenants serve you notice that they are leaving or won't renew contracts that you go and inspect the property. This way you can see it lived in, see what needs repairs or fixes and plan for the work ahead of time. Most importantly this gives you a chance to think creatively about how the property can be better represented when its placed back on the market.
Ask your sitting tenants what they would have loved to be able to change, add or remove from the property. A lot of what they say might not be, but you might be surprised and find some hidden gems in there.
Making a few small tweaks could go a long way in increasing your rental value on the property and make it more appealing to prospective tenants.
Reducing your expenses on a rental property
We always have to think about how we can cut costs on investment properties, not quality, cost.
Often investors have repeating issues with properties that tend to require significant amounts of money because the short-term solution was cheap but only served as a "Band-Aid". One of the most frequent examples I see with this is old boilers. If parts are giving you or your tenant's problems replace the parts, and if the parts are so expensive that it’s close to the price of buying a new boiler, BUY A NEW BOILER. Not only will this save tremendous time and hassle down the line, but you can also share with prospective tenants that the property comes with a brand-new boiler. (It is sad but true that this is a selling feature in the rental market these days).
Those are three simple examples of increasing your overall portfolio value. Buy better, Improve the properties and reduce expenses.
Additional information and contact details
Strauss Realty is a London based Real Estate firm creating value for clients through Property Finding services. It provides a tailored service to clients to help them find their ideal property.
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This post was originally written as a featured guest post for Trinity Financial