Property investment is a fine balance of opposing interests – you need to give tenants what they want in order to keep them happy and retain their business for the long term, but at the same time you want to generate the maximum possible income from your investment.
That’s as much about minimising costs as it is about maximising rents, so can responding to what tenants want tip that balance in your favour?
Historically maybe not, but in a competitive rental market and with tenants increasingly demanding certain features and characteristics from their rented homes, the pivot point may be shifting more towards catering for those desires.
A major example of this is the ongoing leasehold scandal – also known as the ground rent scandal – which has seen some owners of modern leasehold properties locked into spiralling fees for maintenance of communal areas.
While this affects leaseholders rather than tenants, it has shifted the rights of occupiers and the responsibilities of property developers firmly in favour of those who live in the property and away from those who built it.
What do tenants want now?
If you’re looking to invest in rental properties in the immediate future, what do tenants want now?
A new development in London aims to cater for several of tenants’ biggest demands at the moment.
Newington Gate has been developed by Stone Real Estate in the N16 postcode and has several unusual characteristics including:
- 56% affordable homes.
- 39% homes for over-55s.
- Mix of owned, shared ownership and affordable rented properties.
- Zero ground rent payable.
- Solar panels and heat recovery ventilation.
Michael Stone, founder and CEO of Stone Real Estate, said: “Ground rents and their tendency to fluctuate have been a contentious topic in recent years and while the industry is considering scrapping them as a whole, we wanted to drive this change now, in order to benefit our buyers.”
Catering for ageing tenants
One way buy-to-let (BTL) investors can prepare for future demand from tenants is by ensuring private rental properties are suitable for ageing tenants, including those with mobility problems.
The Newington Gate development includes lift access, ensuring that more of the apartments for the over-55s could be occupied by individuals with mobility impairments if required.
It’s a move that more private landlords could choose to emulate in BTL properties – not necessarily by installing lifts, but by ensuring floors are level throughout and doorways wide enough for a wheelchair or walking frame to fit through.
In August 2019, the National Landlords Association raised the issue of undersupply of accessible housing in the private rented sector (PRS).
Meera Chindooroy, policy and public affairs manager at the NLA, said: “There is an acute shortage of accessible housing in the PRS.
“But with the ageing population, this is something that we need to be thinking about and changing now so it doesn’t become an even bigger issue in the years to come. Landlords need to be proactive in meeting this demand.”
Improving accessibility in BTL properties
Improving accessibility in BTL properties doesn’t have to mean making them suitable only for the elderly – there are plenty of small changes that can appeal to tenants of all ages and all levels of mobility.
Some simple modifications that can help to make homes more accessible for all include:
- Open-plan living space with fewer obstacles.
- Wider doorways for easier access including mobility aids.
- Short-pile carpets and hard surfaces e.g. laminate flooring.
- Flat external threshold and level internal floors throughout.
- Smart control systems e.g. wireless thermostats, apps and smart speakers.
Many of these, such as laminate floors and open-plan living space, are desirable not just for tenants with impaired mobility, but are on-trend for renters of all ages.
By incorporating age-friendly features that also play into the fashions of recent decades, BTL investors can future-proof investment property to maximise yields while giving tenants what they are looking for from their rental home.
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Disclaimer: The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.