Rental yields are a key measure of property investment performance, showing the return generated by a property relative to its value. Investors often consider gross rental yield, which calculates income before expenses, and net rental yield, which accounts for costs such as maintenance, management fees, and mortgage payments.
In today’s market, rising costs and increased competition mean landlords must actively optimise their portfolios to achieve higher returns. According to the Office for National Statistics, UK housing costs and inflation pressures have put net rental yields under greater scrutiny for landlords. Here are practical ways to improve rental yields and make your property work harder for you.
Review Your Property’s Rent
The first step to improving rental yields is ensuring your rent reflects current market conditions. Platforms such as Zoopla and Rightmove provide market comparables to ensure your property is priced competitively.
Use rent reviews: Implement rent reviews at lease renewals to capture market increases without affecting tenant retention.
Balance occupancy and profitability: Overpricing can lead to void periods, while underpricing reduces income.
Regularly reviewing rent allows landlords to respond quickly to market trends and maintain a competitive advantage.
Reduce Operating Costs
Lowering expenses is an effective way to improve net rental yields. Consider the following strategies:
Switch letting agents: Review fees and services to ensure you get value for money.
Manage energy efficiency: Upgrading heating, insulation, or appliances reduces running costs. Gov.uk outlines EPC improvements that can also enhance rental appeal.
Smart maintenance planning: Scheduled upkeep prevents expensive repairs and minimises void periods.
Tenant retention: Strong tenant relationships reduce void periods and associated costs.
Energy Performance Certificate (EPC) improvements are particularly effective long-term, as properties with higher efficiency ratings are more appealing to tenants and may command higher rents.
Upgrade Strategically to Increase Value
Targeted upgrades can directly increase rental income and overall property value. High-impact improvements include:
Modern kitchens and bathrooms: Key areas that influence tenant satisfaction and justify rent increases.
Furnished packages: Particularly effective for city-centre apartments catering to professionals.
Technology additions: Smart locks, thermostats, and other tech make properties more appealing and efficient.
Strategic upgrades enhance both marketability and rental yield, making your investment more competitive.
Consider a Different Tenant Type
Tailoring your property to the right audience can significantly improve returns. Options include:
Young professionals: Typically seeking city-centre apartments with flexible leases.
Students: High demand near universities, with potential for guaranteed rental periods.
Short-term rental markets: Platforms like Airbnb can boost income where local regulations allow.
Understanding your tenant demographic helps align property features and pricing with market demand.
Re-mortgage to Reduce Costs
Refinancing can improve net rental yields by lowering monthly repayments. Key considerations include:
Competitive buy-to-let rates: Switching mortgage providers can reduce costs, including green mortgage options.
Regular reviews: Assess mortgage products every 2–5 years to maintain efficient terms.
Reducing financing costs directly improves net returns, making your property more profitable.
Expand or Diversify Your Portfolio
Diversification helps mitigate risk and increase overall yields. Strategies include:
High-yield regions: Cities such as Manchester, Liverpool, and Birmingham often offer stronger returns.
Different property types: Off-plan developments, HMOs, or apartments in regeneration zones can provide higher yields.
Balanced portfolio: A mix of property types and locations reduces exposure to market fluctuations while optimising returns.
Expanding carefully ensures you maintain quality investments while unlocking additional income streams.
Unlock Your Property’s Full Yield Potential
Improving rental yields is achievable with the right strategy. By reviewing rents, reducing costs, upgrading properties, targeting the right tenants, refinancing, and diversifying your portfolio, landlords can maximise returns and strengthen long-term investment performance.
TK Property offers tailored advice and support to help investors unlock their property portfolio’s full potential. Speak with our experts today to discover how we can enhance your returns in the current market.
Contact us today to discuss your property investments and improve your rental yields.
