Balcony vs No Balcony?

Balcony v No Balcony: How much extra could landlords make by investing in properties with balconies and terraces? 

As a landlord, it’s all about how you can maximise the value of the properties in your portfolio. Perhaps a furnished property will fetch you more return on your investment, or even just a new lick of paint and some fresh curtains and carpets.

The old adage “you have to spend money to make money” rings true here: the more you invest in the right kind of changes, the more you’re likely to make back. This means that structural changes like knocking through walls and adding extra rooms and extensions could be a great way to dramatically increase the rental value of your property.

However, there’s one particular structural change you could make that could potentially make you back your investment in less than a year: building a balcony.

New research by CIA Landlord Insurance has revealed the average monthly income landlords can expect to make on properties with and without balconies – and the results are surprising. The research also delves into the areas where renters are most likely to find affordable properties with balconies and the areas where a property with a balcony will be most profitable.

Read on to find out more about what this research uncovered.

How much extra can landlords make by investing in properties with balconies?

With the high demand for properties in cities to have balconies, it’s no surprise that these properties tend to fetch a little more cash. Across the UK’s major cities, on average a 3-bed apartment with a balcony can be rented out for £461 more per month.

This means that over the course of a year, a property with a balcony will bring in an extra £5532 in revenue over similar properties without one.

What is the average cost of installing a balcony?

Sure, £5532 extra average yearly profit sounds great – but to get that you either need to buy a property with a balcony or install one – and balconies don’t grow on trees. However, in the right area, you could make that money back in less than a year.

Installing a balcony can be a tricky and expensive job, but it can increase your rental income on average by 35% per month. It will also increase resale value by anywhere between 5 and 10%. So what does installing a balcony actually cost?

Well, on average, installing a balcony costs around £3000. High-end balcony installation can cost anywhere up to about £5000. More budget-friendly installations can start at £1000.

Cantilever balconies tend to be more predictable in price, with average installation costing between £3000 and £3800.

Juliet balconies are much cheaper, with installation prices ranging from £250 to £1000. However, it’s worth noting that a Juliet balcony is less likely to dramatically increase your rental yield.

Which are the most profitable cities to rent out a property with a balcony?

In certain areas of the country, renting a property with a balcony will net you more profit than others.

The table below shows the top 5 cities where adding a balcony to your property is most likely to bump up your profits.

Whilst it may be surprising that London ranks so low in the top 5, when you consider that the first three cities are beautiful coastal cities with fantastic views it makes sense!

Here’s how much extra a landlord could make in Cardiff if they had a balcony

On average, a landlord in Cardiff can expect to collect just over a thousand pounds a month in rent for a 3-bedroom flat. Over the course of a calendar year, this adds up to a grand total of £13,332.

However, a similar property with a balcony in Cardiff on average fetches a whopping £2,359 per calendar month. Over a year, this is £28,308 in rental yield from one property. This is a 112% increase in yield, just from adding a balcony!

Of course, in the first year, you’ll need to subtract balcony installation costs from your profits, but even a high-end balcony will only run you around £5,000, meaning that you’ll still be looking at a rental increase of 74% over the first year!

In Brighton, Edinburgh and London, landlords installing high-end balconies can expect the installation to pay for itself within a year. In Coventry, it would take just over a year before a landlord could start to expect to see real monetary benefits. However, a cheaper balcony costing under £4,000 would also pay for itself in under a year.

The following table shows the cities where landlords can make the most money renting out properties with balconies and terraces:

Can’t be bothered with Cardiff or Coventry? Bored of Brighton? Not excited about Edinburgh? Not loving London? Well, that’s alright – in pretty much every major city, you’ll see higher rental yield with a balcony. Whilst the percentage increase in rent is much smaller in Birmingham than Cardiff if Brum is where you want to be that 16% increase definitely doesn’t sound too bad!

Where are the least profitable cities for rental properties with balconies?

Well, people love balconies. In every major city included in our research, properties with balconies were more expensive than those without. This means that adding a balcony is probably a pretty great long-term investment no matter where you’re based in the UK. However, you might be wondering where the least profitable large cities are.

The least profitable city is Manchester. The average 3-bed flat in Manchester costs £1473 PCM, but with a balcony, you can expect to bump that up by 9%.

Following in second place for least profitable is Leeds. A 3 bed there costs around 1044pcm, with a 14% increase seen in rent for properties with balconies.

Where are the cheapest properties in the UK to rent a property with a balcony?

The cheapest city to rent a property with a balcony is Belfast. The average 3-bed flat with a balcony in the lovely capital of Northern Ireland will cost around £894 a month. However, if you’re looking for somewhere on the mainland, your next best bet is Sheffield, where a similar property will cost just over £1000.

Looking for somewhere to rent for yourself? Or scouting out the rental yields of the competition? Either way, the table below shows the 5 cheapest cities in the UK where you can rent a property with a balcony.

Which cities have the most properties with balconies available to rent?

Rarity makes for a high rental yield. If you own the only property on the market with a balcony, you’ll be facing zero competition – and everyone loves a balcony! However, if you’re swimming in a sea of balconied properties, you might struggle a little more.

This table shows the cities with the fewest amount of properties with balconies available to rent:

Do renters really want balconies?

We get it: installing a balcony is a big investment. How do you know it will be worth it? That’s why we went a step further, completing a limited email series with more than 2500 respondents to find out if renters really will pay extra for a balcony or terrace.

The evidence was overwhelming. 75% of renters said they would be willing to pay up to £200 more per month for a balcony, as long as it was a full balcony rather than a Juliet balcony. This would mean that even a high-end balcony installation would be paid back in just over two years.

There’s bigger news though: 50% of renters said they would be happy to pay 50% or more per calendar month for a balcony! We’d understand if the increase in rent you could expect to see from a change that costs just a few months of rental yield may be tempting…

It’s clear from this research that landlord’s really can expect to see huge rental increases by installing a balcony, especially in flats in major cities. Landlords: do you think you’ll make the change? Share this research with other landlords in your network and see if they’ll do the same!

Sources and methodology 

We collected rental price data on Zoopla. We selected 3-bedroom flats and filtered for balconies and terraces to get the average monthly rental costs for each UK city. 

Renter response data was collected via an email survey sent to more than 10,000 renters in the UK.