By 2025 more than 50% of 20-39 year-olds are expecting to be living in a privately rented rental property across the UK as the rise of ‘Generation Rent’ continues. Furthermore, as the rental market continues to grow, so does the competition with new market leaders establishing themselves in the rental sector. Therefore, it is vital that landlords provide tenants with a higher quality rental experience if they wish to justify premium rent prices.
Despite the fact that we are in a cost of living crisis, 28.6% of tenants have said that they would be prepared to pay more rent for properties with higher quality furniture.
In this article, we have identified some areas where landlords may be able to attract higher-paying tenants.
Identify target tenant
Firstly, if landlords would like to attract a higher-paying tenant they will need to identify the ideal tenant they want living in their rental property. For example, landlords could rent to a young single tenant, a young professional couple, or a family etc. However, different types of tenants have different rental requirements. Identifying and researching a target tenant is crucial for landlords as they will then be able to tailor the rental property to the tenant’s wants and needs. These wants and needs include location, size of home, facilities and amenities etc.
Focussing on interior design is an important factor for landlords to consider. Modern tenants consider the interior as a very important factor when deciding on where to rent. This is because 70% of tenants consider overall interior design as an important or very important factor when choosing rental accommodation. The go-to interior design choice for many landlords in rental properties can often be quite minimal. A recent survey of 18-64 year olds found that 42% of tenants would prefer their rental accommodation professionally decorated. Therefore, landlords may find it worthwhile to enlist the assistance of an interior designer to design their property with the target tenant in mind. This may help their property stand out from the crowd and be more memorable for potential tenants during the viewing process. This will help lift the quality of the rental experience to justify a premium rental charge.
Offer flexible tenancy agreement
One of the main reasons why Build to Rent developments stand out from the private rental sector is because of their flexible tenancy agreements. Some tenants would like a long-term agreement to provide them with security whilst others prefer a month-to-month option so they are not tied down to a contract. Tenants will be willing to pay more rent if landlords offer them flexible tenancy agreements as it is more convenient for the tenant.
Consider offering pet-friendly accommodation
Demand is currently very high for pet-friendly accommodation as a Dogs Trust Survey found that 78% of pet owners struggle to find pet-friendly accommodation across the UK. Therefore, tenants may be willing to spend more if the property can accommodate their pets. Offering pet-friendly accommodation does come with the risk of causing greater wear and tear to the property. However, because pet-friendly accommodation is currently in high demand most tenants will be looking for longer tenancies to secure their accommodation resulting in longer guaranteed rental income for landlords and higher monthly rental income. Offering pet-friendly accommodation will open landlords up to a completely new market.
To conclude, to attract higher-paying tenants, landlords will need to identify their target tenant and tailor the property to the tenant’s wants and needs. This includes location, size of home, facilities and amenities. We recommend landlords conduct thorough research into their target tenant to tailor the property to the tenants needs to increase their rental income. Other factors landlords need to consider are offering great interior design, offering flexible tenancy agreements and considering pet-friendly accommodation.
How can we help?
At Hawsons we have a dedicated team of property and construction accountants at our offices in Sheffield, Doncaster, and Northampton. Having an accountant who understands the challenges of this dynamic sector and is able to help you plan for the future is an advantage in a competitive environment. At Hawsons we have a great deal of experience in advising and helping businesses in property and construction and we can assist you as your business grows.
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