Factors affecting your rental income in real estate investing
There are many factors that can affect how much you make from your rental properties some of which you cannot control however, there are some factors which you can control. Thus, I’m presenting some of these factors to you to help you increase your rental income and maximise your wealth.
1.Location of the property
This is one of the more obvious ones, there are some places, some cities and certain areas with better rental yields. Some of these places in 2021 are Glasgow (7.52%), Manchester (5.19%) and Birmingham (4.92%). If you can you could try to invest in the areas with the best yields, however this is not the only thing you should take into consideration because you could get great yields in some of the areas with lower average yields if other factors are working for you. And when making a decision about rental properties you should take into consideration as many factors are possible so that you can make the most educated and least biased decision. If you are however, struggling to make your decision its never a bad choice to ask for professional advice.
2. Size of the property
Usually the bigger the property the higher rent you can charge. With bigger properties you have other opportunities too, such as being able to convert one house into many. However, picking the size of your property depends on your budget so getting the biggest house may not be the best idea if you cannot afford it or don’t know what to do with it.
3. The state of the property whether its in a good or bad state
Usually properties that are well maintained and are even aesthetically more pleasing could allow you to charge more rent. But than again if where you’re located is a lower income area, it might not be the greatest idea to get a luxury home because than if you charge more they might not be able to afford the rent and you won’t get tenants.
4. Whether there’s a parking space
If a property comes with a parking space you can usually charge more rent but this will usually mean that the property will also cost more so you have to be willing to pay more for the property. However, this shouldn’t influence the price of the property drastically.
5. Whether it has a garden
Having a garden can also let you charge more as there’s more space but than again it will mean that the price of the property will also be larger, so check whether it fits in your budget. Moreover, a garden needs to be maintained and if your tenants don’t take care of it certain plants could even grow onto your property and in the long term this could even damage the property in some cases.
6. House prices
If house prices are rising it usually means you can charge more rent which can actually be seen in London. However, the opposite is true if house prices are falling. However, the rising house prices might not last for very long in London as more and more houses are being built to increase supply and therefore, drive property prices down. But, we don’t really know how effective this will actually be but you could take it in consideration. Similarly, high house prices don’t always mean the best returns because in London the average rental yield is 3.47% in 2021 which is not the best available in the market.
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