One of the main goals of managing a co-living property for investment purposes is to maximise your rental income and rental yield. Here are some strategies you can take to increase your rental yield.
1. Pick the right tenants
It is important that your tenants pay their rent on time so you can avoid missed or late payments which could affect your rental yield. Therefore, you need to pick the right kind of tenants who are unlikely to fall behind on payments. This will also minimise the likelihood of disputes over late rental payments. Screen your tenants carefully before signing the Tenancy Agreement. Ideal tenants are those who have stable jobs who are unlikely to skip rental payments. Tenants whose employers are the ones paying for the rental as part of their benefits package are also attractive.
2. Choose the right properties
If you are adopting the rent-to-rent model for your co-living property, you should select properties that will have a broad appeal to tenants. For example, a unit that’s close to an MRT station, is bright and airy, and has full condo facilities will definitely be more attractive compared to a walk-up apartment that has no close transport links. An attractive unit will make it easier for you to secure tenants and minimise vacancies which could leave you without rental income. For more tips, read our article Co-living Rent-to-Rent Model: How to Choose a Unit for Rental.
3. Maximise the usage of space
One way to increase your rental is to maximise the space in your co-living unit. For example, if there is extra space which can be utilised as an additional bedroom in the unit, you have the potential to increase your rental. So take a close look at your floor plan and analyse whether there’s room to carve out that extra space.
4. Adopt neutral tones
How to decorate your home can affect whether you are able to attract tenants quickly. To maximise your unit’s appeal, we suggest adopting neutral tones and filling your unit with tasteful furniture in clean lines. Walls that are painted in soft colour palettes or neutral shades such as whites, creams or beige will make your unit brighter. Avoid colours such as red or bright purple as not all tenants may appreciate such loud colours. A classic interior such as Scandinavian or Japandi décor will never go out of style.
For other décor ideas, read: Tips and tricks to maximise space in your co-living unit
5. Select the right location
Having the right location that’s convenient and accessible will allow you to command a higher asking rental for the rooms in your co-living unit. Choose a unit that’s located near to MRT station and with plenty of amenities and F&B choices nearby. Tenants will be willing to pay a higher price for a convenient location that’s close to transport links and where they won’t have to travel far to get food.
6. Provide value-added services promptly
As a co-living property manager, you need to provide value-added services such as housekeeping and regular maintenance services such as air-con servicing, pest control and repairs as and when needed. If your tenants have any issues, make sure that you attend to their enquiries or solve their problems promptly. When your tenants are happy with your service, they are more likely to renew the Tenancy Agreement. This is an opportunity to increase your rental price again during the renewal.
7. The value of staging and good photos
Don’t forget that staging is an important aspect of the marketing process. A well-staged unit can accentuate the best features of your co-living unit and create a positive first impression when your prospective tenants come for a viewing. This will put you in a better position to ask for a higher rental price. One last tip: invest in professional photography so that your unit will look attractive when you list them on property websites.