Making high returns on your investments is not just a function of the size of your portfolio but also its efficiency and effective management. If your real estate investments don’t generate enough profit as expected, you need to restrategize. Rental property can be a great source of income but it can also be a huge headache if not properly managed.
The biggest areas for improvement that will positively impact your profits are occupancy, on time payments and maintenance.
See below 3 ways to maximize profit on your rental properties.
The quality of tenants that occupy your property is like the foundation for everything and a key determinant of how your investment will perform.
As a rental property owner, it’s absolutely vital for the collection of your rental payments to be timely. Payment delays are not good for your business. Bad tenants may also damage your property and leave a whole lot to be repaired. To avoid this, you need to do a thorough background check to ensure you won’t lease to tenants who would give you problems. You need to follow the basic tenant screening practices to identify the loop holes and act accordingly.
The goal is to find quality tenants that take care of your property and also pay consistently while you increase the cash flow from your rental properties. Late payments, stubborn tenants and property mismanagement is not only a nightmare but also ensures you don’t get the best out of your investments.
Tenant vacancy is always a huge issue for property owners. The longer the downtime, the more money you lose. One of the ways to manage this risk is to consider long lease.
You could reduce rental rates by giving discounts, depending on the number of years. This may lead to higher revenue especially if you give discounts and do a 3 to 5 year lease or more.
Some of the advantages of long lease also include the following:
- It attracts serious renters who are willing to commit to your property.
- Peace of mind knowing that there will be no vacancy for that period.
- Not doing repairs yearly will increase your savings.
Choose a good location!
This is still as relevant now as it was in the past, if not more. Oh yes, we know you’ve heard it time and time again, but we’d say it again; location matters and it still tops the list of factors that determine profitability in real estate investments. Before you invest in a property, do your research to determine and have an idea of the value potential tenants are willing to place on the property.
Some of the factors to look out for are proximity to amenities, neighborhood status, scenic views, etc.
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