As an investor, how do you ensure your rental property stands out? The answer lies in interior design
This post was written in collaboration with PropertyData
There are around 2.7 million rental properties in Scotland, making the market highly competitive. As an investor, how do you ensure your rental property stands out? The answer lies in interior design, where even small transformations can drastically increase your rental yields. Learn how high-end interiors can maximise your return on investment (ROI) and discover expert advice for your renovation in this guide.
What are rental yields?
Rental yields are the percentage ROI you can expect to earn from your property every year. They’re calculated by dividing the annual rent by the home’s purchase price, then multiplying the result by 100.
For example, let’s work out the rental yield percentage for a property purchased for £250,000, where the rent is £1,200 per month:
Step 1: £1,200 × 12 = £14,400
Step 2: £14,400 ÷ £250,000 = 0.0576
Step 3: 0.0576 × 100 = 5.76%
As an essential metric for measuring profitability, it’s important to stay aware of your rental yield and the general averages in your area. Use rental yield data to learn more about potential profit from a fully renovated property.
Do tenants care about interiors?
In short: yes, absolutely. Around 70% of tenants consider interior design as either an important or very important factor when choosing a property. They want somewhere that’s been finished to a high standard and feels like a home, with clear effort placed upon the quality of the interiors.
This isn’t just about aesthetics, either. Beautiful interiors indicate to tenants how well-maintained the property is and how much you – the landlord – are willing to invest in their comfort.
A high-end interior brings plenty of perks to your profit, including increasing demand from quality tenants, justifying higher rental prices, and reducing void periods. When your rental property looks the part, you’re opening the door to more lucrative rental yields.
In fact, after renovations, 80% of landlords report being able to increase the rent they charge. Around a third saw rent increases of over 20%, highlighting the full potential of interior design.
Interior design tips for high rental yields
- Kitchens and bathrooms
These are typically the highest-impact, highest-ROI areas, making them a priority for maximising rental yields.
Prioritise a clean aesthetic with luxury finishes and high-end appliances – like an induction hob in the kitchen and a rainfall showerhead in the bathroom. Durable materials, like porcelain tiles and engineered stone worktops, ensure long-lasting appeal for a rental that oozes quality.
2. Layout and space optimisation
Look at optimising your layout to suit rental demand. Open-plan living/kitchen areas are highly desirable, for instance, while reworking awkward corridors can improve the flow of your property. The space should feel intuitive and functional for potential tenants, and there are bonus points up for grabs if you can incorporate a home office.
3. Quality storage
Where possible, look at options to enhance storage, particularly if you have a smaller property. In the kitchen, for instance, you can maximise function with pull-out pantry drawers and swivelling units. For larger homes, creating a dedicated utility area is a popular feature amongst tenants, ideal for maximising rental yields.
4. Lighting design
Transform the feel of your property with well-chosen lighting and turn standard rental spaces into cosy, functional homes.
Opt for layered lighting throughout, including task and ambient lights. Under-cabinet lighting in kitchens is ideal for a high-quality finish, while soft lighting around bathroom mirrors creates a spa-like ambience.
Incorporate dimmable lights where possible, too, allowing your tenants to adjust the space to suit their preferences. Flexibility is a major perk in the rental market.
5. Avoid over-personalisation
While high-end interiors are a major selling point, keep personalisation to a minimum. The most successful rental properties are those that feel both consciously designed and universally appealing.
Use a timeless, neutral colour palette paired with high-quality finishes to elevate the space. Leave room for your tenants to add art and colour, while providing a beautiful and functional backdrop that’s rooted in high-end comfort.
Final Thoughts
Upscale interiors can transform rental investments, turning plain properties into in-demand homes. Just remember to always keep your target audience in mind when renovating, and opt for designs with widespread appeal.
