Increase Your Letting Potential

There’s sometimes a fine line, or Catch 22 if you like, between how much money you should invest in a house and what you can expect in return. Of course our figures here are purely hypothetical, based on our experience in the letting agency business around Aberystwyth, but certainly worth a bit of thought if you have a property in need of a bit of TLC, or are considering buying.

Let’s use an empty house that needs a lot of attention as an example. The house has 6 bedrooms, and is registered as a HMO (therefore already costing well over £2000 per 5 years). So it’s prime student house worthy, but with the rise of standards (and rightly so) across the board, the house needs to be in tip top condition to get the maximum rent.

We estimate, depending on communal space and features, that a 6 bedroom house with double beds and bills included can range from £75 to £90 per person per week. If, like many of our houses, the house has been well kept and is modern, then you’re looking at the higher end of the scale and a rental income of £540 a week.

For a 6 bedroom house with lounge, kitchen and potentially a dining room, you’d need to allow £12 a week per person for bills – that’s gas, electricity and water. So, your maximum weekly income minus your bill allowance gives you £468 a week. You might want to stand out from the crowd and offer broadband for free too, this will cost you probably just under a tenner a week, so £458 a week.

At Redfern, all of our contracts are 51 weeks long for the student lets. We offer a reduction of 50% rent over the summer period (usually lasting 8 or 10 weeks, depending on the landlord). This means a potential (top end) rental income (minus the bills) of £21,996 over the course of a tenancy, for one academic year.

With that in mind, why would you skimp on work in your house? Sadly we see too many landlords who don’t want to invest in their house, the condition worsens and eventually you start dropping the rents, if you can even manage the fill the rooms.