With rents at sky-high levels, buying a rental property may appear to be an attractive investment at the moment.
Despite buy-to-let mortgage rates also being relatively high, it’s still possible to make a profitable income from the private rental market, providing that you buy wisely.
If you’re contemplating buying a rental property, it’s essential to ensure it will appeal to your target tenants. It’s crucial to be aware of the market before deciding what type of property to buy; for example, fewer first-time tenants are taking the decision to rent, so landlords need to be aware of the key features that will attract such tenants to a property.
Let’s find out what tenants are looking for most from a rental home.
The changing rental market
While rental properties are in high demand and rental rates have risen dramatically in recent years, the outlook for the rented sector is shifting.
Rising rents have led to the number of first-time renters falling, as they stay in the family home for longer to save money. Despite this, many people must move to take up jobs, but they are more exacting about the type of property they want as their next home.
First-time renters now account for just 4.6% of new tenancies, (down from 6.1% in 2015), that’s just under one in 20 new tenancies in Britain, according to research by Hamptons estate agents. To ensure that their property is relevant to both this market and a wider range of tenants, landlords need to know which features are most prized by renters.
The ten key features that renters look for when choosing a property
|Feature||Percentage of respondents|
|Secure doors/windows & safety features (alarms, Ring doorbell, etc.)||60%|
|Garden/private outdoor space||46%|
|Good natural lighting||29%|
|Neutral painted walls||16%|
Safety and security
Security equipment came out as the most desirable item that a property can have in a survey of over 2,000 UK tenants carried out by Uswitch for their Renters Requirements report. Almost two in three renters prioritised security, wanting secure doors and windows, and safety features such as an alarm system or a Ring video doorbell. Buying a property in a local council area with a low crime rate will also help tenants to feel safe. Extra security measures could include installing CCTV cameras, additional locks, and a peephole to the front door.
The second highest priority was garden space which has become more important post-pandemic: almost half of those surveyed wanted garden access from their home. Gardens ranked as the second most desirable feature for all age groups except the 18-24 bracket. A property with a patio or balcony will give that little extra flexibility and a chance to get some fresh air. Proximity to a park is a valuable plus point, especially for families. If there is a garden, make sure it’s well-kept and appealing, and work out who is to be responsible for maintaining it. The simplest solution is for you to engage a regular garden maintenance firm and factor this into the rent.
Demand for more properties that allow pets
More properties are having to allow pets as this has become an important part of the decision-making process for many renters, with four in ten seeking accommodation that allows pets. As a landlord, you may want to make sure that the letting agent includes a clause in the tenancy agreement stating that the property must be professionally cleaned at the end of the tenancy.
Energy-efficient property is also definitely on people’s radar – over a third of people will look for double glazing in a rented home. Energy efficiency is a high priority for those over 55s who appreciate double-glazed windows in a new home. If a property has fitted appliances such as washing machines and dishwashers, the more modern they are the better as they will have a higher energy rating, meaning lower bills for tenants.
Open-plan living areas are also popular, as is space for a home office, even if it’s in a section of a living area: it may be worth considering knocking a dividing wall out to create a more appealing space.
Storage is important, especially to long-term renters, and it would be useful to maximise storage access to the attic or cellar.
New rental properties or those recently renovated will be more appealing to tenants than tired accommodation in need of a revamp. Easy improvements include a paint refresh, and a modern kitchen and bathroom will always be attractive.
Lots of natural light will instantly make a rental home more desirable.
A parking space or driveway is also beneficial with a home to rent.
Proximity to shops, amenities, places of work, and public transport always make rental properties more desirable.
Furnished or unfurnished?
This decision is split firmly into age categories, with younger renters looking for furnished living space while older renters and families often have their own furniture and prefer to have unfurnished accommodation. Uswitch’s survey revealed that half of UK renters look for unfurnished property. Just under a quarter (24%) of those aged 18-24 prefer unfurnished, while this rises to 48% of 25–34-year-olds preferring unfurnished. Younger people prefer furnished (47%) and prioritise security features, gardens, and the ability to have pets. Up to 77% of the over 55s category want unfurnished accommodation for their next home, and this age group prioritises security features, garden access, and double-glazed windows.
Preferences for furnished or unfurnished property
|Type of property||Percentage of respondents|
Invest in the right property
Clearly, it’s important to establish what your target tenants are looking for before identifying a property to invest in. Uswitch.com’s buy-to-let mortgage expert, Kellie Steed, gives some tips on how to find the right property as a landlord:
Our survey data has shown that investing in a rental property isn’t as simple as selecting one based on the number of bedrooms. Tenants have clear priorities that will persuade them to rent a property, so if you’re considering becoming a landlord, here are some things to keep in mind:
Property location: looking at similar rental properties in an area can give you an idea of how much you could make in that location. Be sure to keep in mind the proximity to amenities and transport, as well as where you are situated. 45% of those surveyed said they would be deterred from a property if it was in a loud location.
Property features: depending on the desired tenant type, certain property features will be more attractive and potentially increase the price chargeable. Almost half of the renters we surveyed are drawn to properties with some form of private outdoor space, so take this into consideration when calculating your return on investment.
Furnishings: whilst furnished properties can bring in a higher rent, our survey shows there is a great demand for unfurnished homes. You may find it easier to attract tenants by leaving your property a polished blank canvas. If you do furnish the property, try to tailor it to the type of tenants you wish to attract – furnished was most popular with the 18-24s, so you may wish to consider this group when furnishing.
After carefully considering which sector of the private rental market you want to buy into, and researching buy-to-let options – Uswitch’s buy-to-let statistics page might be helpful here – you can fine-tune your approach to providing what your target tenants are looking for in their next home.