Cornerstone Asset Advisors Ltd founder Emile Salame benefits from a wealth of experience and knowledge of the London property rental market. As a real estate portfolio manager, he manages a diversified commercial and residential real estate portfolio in the United Kingdom and United States for a family office. This article will look at the residential property rental market, outlining steps adopted by market-savvy property owners to ensure their property appeals to their target demographic.
When drawing up a property business plan, rental property owners need to consider their target audience. What type of tenant is their property likely to appeal to most? Which demographic would the location and nearby facilities attract? Who would a property of this size, layout and style be most appropriate for?
Homing in on a subsection of the population helps landlords to gear their property towards a particular type of tenant, enabling them to make the property more appealing to their target audience. For example, a third-floor flat in an apartment block with no lift is unlikely to appeal to a young family with a buggy or people with disabilities. In this scenario, it would be prudent to aim for young professionals, kitting the flat out with simple, modern furniture and decorating it to a high standard to help it stand out from similar properties in the local area.
Landlords targeting the student population will need to invest in affordable properties with close proximity to educational institutions, providing a study space, functional furnishings and easy-to-clean surfaces. Those targeting families, on the other hand, will need to look for comfortable and practical homes with ample storage space and outdoor areas, incorporating cosy interiors, safety features, child-friendly layouts and durable materials.
Recognising that the exterior of the property is the first thing potential tenants will see, rental property owners need to ensure that the exterior is inviting, creating curb appeal through the addition of well-maintained gardens, freshly painted entranceways and adequate lighting. Installing lights by the front door and along pathways not only adds a welcoming touch but also enhances security.
Tenants weigh up numerous different factors in seeking out the perfect property. In addition to focusing on a particular town or city, tenants may prioritise a particular area. When investing in rental properties, property owners need to consider market saturation, i.e. the availability of similar rental properties locally, as well as gauging rent levels, general standards and the types of tenants residing in similar properties.
Landlords also need to consider the level of rental income they hope to generate from the tenancy, as well as factoring for ongoing expenses they will incur in maintaining the property such as landlord’s insurance, taxes, agents’ fees and any mortgage repayments. They will also need to consider the duration of lettings, i.e. whether they wish the tenancy to be on a long-term basis or a continuous series of short-term tenancies such as student lets. Another consideration is the level of involvement they wish to have in day-to-day management of the property, a factor that is likely to be dependent on how far away they live from it.
In trying to appeal to prospective tenants, rental property owners need to keep in mind that certain rooms are more important than others, paying special attention to these key areas. A clean, fresh bathroom is crucial, as is a modern and functional kitchen, as many people consider the latter room to be the heart of the home. The living room is typically where tenants will spend most of their time, so this also needs to be cosy and inviting. Arranging furniture to create a social space makes lounges more appealing, as does adding furnishings such as throws and cushions and soft lighting to exude an air of homeliness and comfort.
