How to Maximise Returns on Your Property Investment

It is tempting to think of investment return as something that happens after you buy — a function of how well the property is let and managed. In practice, most of the return is determined at the point of purchase, by what you bought and what you paid for it. The management stage protects the return; it rarely rescues it.

Buy the layout, not just the address

Within a single building, two apartments of the same size can perform very differently. Layout efficiency, natural light, outlook, floor level and proximity to lifts and refuse rooms all affect how quickly a unit lets and what it achieves. A well-laid-out apartment on a good line will outperform a poorly configured one in the same tower, consistently.

This is the part of the decision that rewards viewing in person, or having someone view on your behalf who will tell you what is wrong with a unit as readily as what is right.

Understand the full cost of ownership

Gross return is a headline. Net return is what you keep. The difference is made up of service charges, maintenance, periods when the property sits empty, agency and management fees, and the cost of preparing a property between tenancies. A property with a slightly lower gross return and low running costs can comfortably out-earn one with a higher headline figure.

• Service charges, which vary significantly by building and amenity level
• Vacancy between tenancies — the single most underestimated cost
• Maintenance and reactive repairs
• Leasing and management fees
• Preparation and cleaning between tenants

Reduce vacancy before you chase rent

An empty month costs more than most rent negotiations gain. A property let promptly at a sensible rent will usually out-earn one held out for a higher figure that takes weeks longer to achieve. The arithmetic is unforgiving: every void period is a permanent loss that cannot be recovered later in the year.

The same logic applies to renewals. Retaining a reliable tenant who pays on time is almost always worth more than the increase you might achieve by replacing them, once you account for the void, the re-letting cost and the risk of an unknown tenant.

Present the property properly

Presentation affects both the rent achieved and the speed of letting. Clean, well-maintained, neutrally presented properties let faster. This does not require expensive renovation — it usually means addressing the small defects that accumulate, ensuring the property is professionally cleaned, and having it photographed properly.

Keep the paperwork current

Tenancy contracts, registration, deposits and renewal notices all have processes attached to them. Handled correctly they are routine; handled late they create disputes, delays and cost. This is unglamorous, and it is where a great deal of avoidable loss occurs.

Review annually

A property portfolio is not a set-and-forget asset. An annual review — of the rent achieved against the current market, the condition of the property, the service charge, and whether the asset still suits your objectives — is what keeps a portfolio performing over years rather than months.

If you would like a review of a property you already own, or want to discuss what to look for before buying, our advisory team can go through it with you.