A new year is always a good time to take stock of where we are and where we want to be. We do this in our personal lives, and it’s a good idea to apply this concept to our businesses as well. You have invested in rental properties to increase your financial portfolio. Is it performing as well as you would like it to? If not, these resolutions might be a good place to start.
1. Decrease vacancies
The easiest way to do this is to find long-term tenant, but it’s not the only way. Advertise a vacancy as soon as you learn of it. That way you just might have a new tenant lined up before the old one moves out.
Make your property the most highly desired in the area. If the apartment itself doesn’t have a big draw like location or spacious closets, make it the best bargain in town. Do the math. If you are losing 8% yearly due to vacancies, drop the rent by 5%. You’ll still come out ahead.
2. Minimize turnovers
Whether you manage your properties yourself, or hire a property manager, it is your job to make sure your tenants feel respected, valued, and satisfied. Don’t give them a reason to want to move. One easy check-up is to send your tenants a postcard asking for feedback and reassuring them that they are a priority. Include a phone number that will give them quick access should they need it.
3. Increase rent strategically
This is a delicate balancing act. If you have established, long-term tenants, it’s time to take a look at your competition. If your rents are on the low side, a modest rent increase may be appropriate. Remember, it’s expensive to move, especially if the other rentals in the area are higher. Just make sure it’s cheaper for your tenant to stay with a modest rent increase than moving. If you can make the increase coincide with an update or blame it on increased HOA fees, all the better.
4. Be diligent on late fees
Showing kindness and respect to your tenants doesn’t mean being a pushover when it comes to collections and late fees. Collections are one of the unpleasant tasks of the job, but are essential to making money. This is, after all, a business. If you let the tenant pay late just once without the late fees added, you are just asking for headaches. If late fees are due, do not accept a payment that does not include the late fee. It has now become part of the rent according to your contract. Hold firm to the terms on the contract and they will learn quickly that they cannot take advantage of you.
5. Add services to increase income
This is such an easy way to increase income, but is often overlooked. In multi-family properties, add vending machines or a coin-operated laundry. Keep machines maintained so that tenants will use them. For single family homes, contract with house-cleaning or lawn services and offer these services to the tenants. If the lawn service charges you $50 per month, then you charge the tenants $60. It’s just good business.
As your property managers at Martin Presence, we know the area market. We keep up with current rental trends and profit-making ideas. For a small percentage of your collections, we will make sure that your property is realizing its full potential. Start 2018 right, and give us a call.