The number one goal of most rental property owners is maximizing income. But what happens when things stagnate, or worse – start to go in the wrong direction? Let’s explore a few simple yet highly effective ways that successful real estate investors, landlords and property managers can increase the profitability of their rental property portfolios.
Vacant units not only equate to lost revenue, but getting them rented again means spending more of your budget. As such, your top priority should be keeping all of your available rental properties filled with high quality, long-term tenants. There are a number of ways you can do this. Start by properly screening tenants to ensure they are high caliber. Next, optimize the turnover process so that vacant units can be ready to be re-rented as quickly as possible. And, of course, make sure you’re making a concerted effort to keep your existing tenants happy and engaged.
Maintaining your rental properties is one of the easiest and most effective ways to keep them marketable so you can charge higher rent and also minimize turnover by keeping your units occupied with happy tenants. To that end, make sure you are providing fast, high-quality service. We strongly recommend partnering with reliable contractors you can trust and leveraging technology, like property management software, to streamline and optimize the maintenance process.
Don’t Cover Utilities
Many well-intentioned landlords mistakenly believe that including the cost of utilities in the monthly rent price is a good way to attract and retain good tenants. While this may be true in some cases, taking on the responsibility of paying for other people’s utility usage can become a costly headache you simply don’t need. A quick and easy way to maximize your rental property’s profitability is to shift this cost to the tenants, where it rightfully belongs.
Raise the Rent
If you’ve kept up with property maintenance and done your part to establish positive relationships with your tenants, chances are they’ll be more than happy to renew their lease. When that time comes, you may be able to increase the rent. If you do decide to go this route, however, be sure that your proposed increase is fair and justifiable, based on the market. A modest increase is not only acceptable, but in many cases, it’s expected – just don’t overdo it. It’s not worth losing a good tenant over a few extra dollars.
Owning rental properties can be a lucrative venture, but only if you’re being strategic in how you run and manage them. These four things can help ensure that getting the highest return on your investment, keeping tenants happy and laying the groundwork for a profitable future.