Are You Targeting the Right Tenants with your Buy-to-Let?
As a landlord, you want to ensure that your properties are filled by happy tenants at all times. But in making assumptions about the kinds of people who will be living in your property, you could be missing out on your target market and this could leave you with empty periods where the home is empty for long periods – every landlord’s worst nightmare.
But how do you know if you’re targeting the right tenants? The trick is to do your research prior to investing or marketing the property. The better you understand your prospective tenants, the more consistent your yields will be.
Knowing your target audience
When you can drill down into the various groups of people that could potentially rent your property, it’s much easier to know who you’re targeting so you can make your property more appealing to that specific niche. Being able to identify your ideal tenant means you’re able to make a real connection.
When looking at your buy-to-let, is it obvious who you’re looking to attract and are you staying in line with the location you’re in to appeal to those audiences? From schools and transport connections to shops and businesses, these amenities evolve with changing demographics.
There are several different types of tenant to consider when letting out a property, including:
Families vary from low-income families looking for longer-term housing to higher-income families seeking short-term rentals while one parent relocates for work, or while a property purchase is nearing completion. And research suggests that new parents are just as likely to rent as to own now due to rising property prices.
Knowing which type of tenant you’re targeting can help you here significantly. A low-income family, for example, will typically want a cheaper property with multiple bedrooms for long-term living that’s close to amenities and schools. A higher-income tenant may want a larger property in a sought-after location. However, to appeal to a high-income family, you’ll need to ensure your property is furnished to a high-standard and has modern fixtures.
Students tend to be short-term tenants, but if you’re targeting the student market, there’s a certain level of consistency since there will always be students in need of housing throughout the academic year. If you’ve invested in a property in a university town or city, targeting student tenants could be a good investment.
When targeting this group of people, you want to ensure you’re investing in a property that has good transport connections, particularly to the university, as well as bars, entertainment and food outlets. You’ll typically need to supply a furnished property too when targeting this group. However, bear in mind that you may need to remarket the property quicker than with other groups as most students will only require the property for the duration of the academic year.
Older renters often choose to rent because they’re downsizing or have relocated and want some flexibility while they decide where they want to reinvest. The benefit of targeting retirees is that they’re reliable tenants and tend to look after properties well, such as maintaining the garden or taking care of routine maintenance.
These types of tenants are also likely to have their own furniture so you can list unfurnished properties when targeting retirees. To appeal to older tenants, you want to look for properties close to public transport, that have easy access to amenities, and opt for accessible properties such as ground floor flats or bungalows.
Young professionals tend to seek out rental properties in the heart of the town or city, where you’ll find a large proportion of employers. This age group of 25-34 year olds are still the most likely group to occupy rental properties so properties that appeal to professionals are a worthwhile investment for landlords. Young professionals are likely to look for modern, energy-efficient properties with smart features and sleek furniture.
The benefit of targeting professionals is that they’re reliable tenants in full-time employment. You can therefore be more assured of consistent rental income and since you’re marketing a more modern property, the rental yields you can expect may be higher.
Tenants with pets
Not every landlord will accept pets, but in avoiding this subsection of the market, you could be reducing the number of possible tenants to fill the property. Being a pet owner can reduce the number of options in the rental market.
And while there are possible pitfalls for a landlord due to the risk of damage to the property, there’s also a lot of advantages in terms of keeping the property occupied since pet owners may be more inclined to stay for longer due to the difficulty of finding a pet-friendly home. It broadens the scope of potential tenants for landlords and could minimise the need to remarket the property regularly.
How to appeal to your desired market
Once you know who you’re targeting with your property, you need to make the necessary changes to ensure that when the property hits the market, it appeals to that specific group.
In addition to refreshing the property and making sure nothing is damaged or working inefficiently, you should also maximise your options by decorating the property in neutral tones. While you can target a demographic with location, facilities and the style of property, you can’t appeal to a broad range of people easily where decor is concerned as everyone has such different tastes. By choosing neutral colours and materials, you can broaden your options and ensure that the property is a blank canvas for the tenants who eventually move into the property.
You can also tailor your marketing strategy to appeal to the key features that each demographic is looking for. For example, if you’re targeting students, you may want to highlight the local amenities, the cheaper rent, the transport connections and furnish the property. To target older tenants, you may want to showcase the garden, the accessibility of public transport and choose accessible properties that allow for long-term rentals. Families will want plenty of space and room to grow if they’re considering a long-term rental agreement, as well as fixtures and fittings that meet a busy lifestyle.
There’s immense value in knowing who you’re targeting with a rental property, whether you’ve already invested and want to maximise your marketing efforts or you’re looking to invest in the future and want to be sure you’re choosing a property that best meets the needs of your target demographic.