6 Tips to Maximize Your Rental Returns
According to the news published by a popular newspaper, rental
returns in India are among the lowest globally. But if one takes into account
the capital appreciation, the returns surge to over 20 per cent compounded
annually - which is among the highest globally.
But today, the
situation is definitely changing. Owners and tenants are looking out for wise
options. Here are some tips and points landlords can consider to help maximize
rental returns and thus keep tenants happy:
Target the
right base of potential tenants
Targeting
the right audience is important. Most of the Grade 1 and 2 cities or the
so-called IT cities have areas concentrated with these companies and other
factories. Families and individuals who want to avoid or minimize travel look
for houses in these areas. Investing in these areas can help reap big benefits.
Owning a property near colleges and business areas can be very attractive to
students and young professionals.
Consider
offering fully furnished property to tenant for better returns
There are
tenants who look for houses on a short-term basis. Providing a fully or
partially furnished house can attract such customers easily. Tenants will be
willing to pay more for a house with a bed, couch, television, washing machine,
a wardrobe and a gas stove, especially when they do not plan to settle in the
city for long. Providing a maid too can help to increase your rental income
considerably.
Recently, a
newly married couple was forced to move to Bangalore for a short span of 6
months. Since they were not in a position to start from scratch, they were in a
dilemma. Through a few acquaintances, they managed to find a fully furnished
house, including a maid, which was perfect for their requirement. Instead of
paying Rs 15,000 for just a house, they paid Rs 21, 000 and got all the
amenities they wanted.
Woo the
customer with additional attractions
Wireless
internet is a big attraction these days. Air conditioners are another
attraction or a necessity especially in places like Chennai. Tenants will
definitely fall for it because otherwise they would have to shell out extra for
an air conditioner. The rent can thus be increased by around Rs 1,500-2,000 for
these added attractions.
Even single
rooms can generate good rental returns
Renting out
single rooms is yet another way to increase your rental returns. If the room is
comparatively large, you can allow double occupancy. And the house can be
furnished with a few amenities as mentioned above. This will be an attraction
for working men and women, especially those fresh from college and who have
just moved into a new city. By charging each individual separately, landlords
stand a chance of increasing their rental returns. If a 3BHK flat is rented out
for Rs 18, 000 for a family, giving out each bedroom for double occupancy,
charging Rs 4,000 per person, can bring in a monthly income of Rs 24, 000.
Safe and
covered parking lots can fetch you better rental
Providing
safe and covered parking space within the compound has become necessary and
scarce. Making provisions for this gives an added reason to increase the rent.
Also focus
on other important aspects
A lot of
people go in for aesthetics. A newly painted house definitely can increase the
value of a property. Using neutral shades will be helpful. A few potted plants
on balconies or in open spaces can make the place look more beautiful.
Storage
space is another bonus. Converting a Pooja room to a creative storage area or
providing under stairs spaces with a cupboard can earn you extra points.
Fortune
favours the brave. To maximize rental returns, one should dare to offer a point
of difference in the rental property. Take every available opportunity to
increase rental returns with minimum and wise investments. A proactive approach
and a bit of initiative go a long way. Choose what is best for your property
and what fits into your budget and see the money roll in.
Happy Investing
Source:Yahoofinance.com
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