Maximize Your Rental Property’s Return On Investment
Both those who have used a property manager before and those who have not quickly learn the value of hiring Real Property Management. Here’s why.
Preserve Your Property
Taking care of your property is more than just paying a property manager to watch over it. At Real Property Management our goal is to protect your investment and make you the most money. We use the most accurate data available to determine the best monthly rent rate for your property. We guide you in understanding what improvements should be made to garner higher rent and attract tenants who will take care of your home. We also conduct move in assessments and regular inspections, complete with photos, to make sure your property stays in good shape.
Finally, we save our clients time and money with cost-effective reliable maintenance through in house systems and use of our exclusive preferred vendors. We also know how to proactively manage and respond to tenant requests to save you money long-term.
Your home’s value is important not only while it is a rental, but also for long-term property appreciation.
Rental Homes: The New Income Generator
A lot of people have found success with converting their house into a rental property in order to generate extra income. The profitable ones find a way to tip the scales in their favor by the time the home is ready to be rented out to new tenants, but it doesn’t come without a lot of hard work and sweat. In addition to cleaning the property, there are oftentimes renovations that can quickly turn costly and time-consuming, especially for someone with limited experience in the rental home corner of the real estate world.
Maybe you’re one of these newbies and maybe you’re not. Regardless, if you’re considering taking this step with your own house in order to increase your monthly income, you need to know that the single most important key to success, in this case, will be maximizing your return on investment ROI. In plain terms, ROI measures the competency of the transaction. To determine ROI, divide the return you get from the investment by the cost of the investment price. The result will be depicted as a percentage. Your target should be always be a double-digit return in the first few years.
If your goal is to create extra income, naturally you should want to maximize that income, as well. Finding ways to both convert your house into an attractive new pad and to maximize its money-making potential can be done, but it’s a tricky business. Luckily, there are some simple, yet beneficial tips that can help you do just that.
In This Case, Less Is More
Because rental tenants are only temporary, designing and updating the property by the same standards you would your own home is not necessary. You want it to look nice, clean, and inviting, but don’t overspend on materials of the highest quality for renters who will not be staying long term. You can purchase quality, reliable products and appliances without the frills of the more expensive brands.
Replace Only As a Last Resort
If and whenever possible, save yourself the expense often related to repairing household objects and appliances and try to repair or clean these things to the best of your ability. There are things, like replacing all the carpets and repainting the entire house each time a renter moves out, that are quick and certain ways to lose money, so be cautious when making replacements.
Items to consider before replacing are:
- Carpets – While it is wise to replace carpets on average every 7 years, and most landlords do practice this procedure, it is possible to clean carpets that looked unsalvageable and make them re-useable and attractive once again.
- Ceilings – Painting ceilings less frequently is another way to reduce cost and maximize rental income. Unless the previous tenants were heavy smokers, the ceilings should not need a new coat of paint each time the property gets new tenants.
- Walls – Dented walls or walls with holes can be repaired, and dirty walls can be scrubbed with heavy-duty cleaners such as Magic Eraser or a mixed cleaning solution made by combining bleach and water.
The 2 Most Important Rooms of the House
Another tip known by successful landlords is to use the bulk of your reserved funds on improving and updating the kitchen and bathrooms of your house. These 2 rooms are universally most important, and for good reason. Nobody wants to enter a filthy, grimy bathroom, nor do they want to use a toilet that won’t flush or wash their hands in a clogged sink. Likewise, an ugly, 70’s themed kitchen won’t garner you many excited responses from potential renters, either. So whatever you plan to spend on renovations, it may be wise to bump these 2 rooms to the top of your “renovation list”.
Small Things Don’t Go Unnoticed
In addition to the more detailed tips listed above, there are other small things you can do to help get your house rental house ready, and to maintain it along the way.
These tips are inexpensive and easy to do:
- Paint the Walls – Giving your walls a fresh paint of coat every 5 years or so is a simple, inexpensive way to spruce up your rental property and can really bring some needed charm to a space that has become dull over the years.
- Clean, clean, clean – No one will ever reject a rental because it is too clean.
- Fixtures – Buying and replacing fixtures is another way to easily update the look of your rental property. Sticky doors, leaky toilets, outdated light fixtures, dull cabinet hardware, and drippy faucets and tubs should all be replaced and kept in good condition to keep your rental looking clean and well maintained.
Shorter Vacancies and Quality Tenants
For each day a property is vacant, it’s money out of your pocket. We spend thousands of dollars every month advertising vacancies to get them filled—faster. Placing the wrong tenant in your rental home can also cost you– on average, 4 to 6 times the monthly rent rate. We screen tenants thoroughly to make every effort to find reliable tenants who will pay rent on time and treat your home like it was their own. Smarter tenant placement is a result of our rigorous background screening process, including credit, employment, rental history and criminal checks, using a systematic business approach.
When collections and evictions are necessary, a streamlined, automated system ensures that the process is completed as quickly as possible, while ensuring all laws and codes are followed and no step is missed.
Lastly, here are a few things that will lower your ROI and should be avoided:
- Don’t be so quick to choose a tenant. Be more picky and opt for a background check if possible to avoid extra costs like premature move outs and failure to pay rent.
- Make repairs to small damages before they become major damages.
- Avoid purchasing potential rental homes in unkempt, rundown neighborhoods, as they are more susceptible to theft and vandalism
The above tips might not accumulate to much savings if used individually, but they can make a huge difference in cutting costs and maximizing return on investment ROI to the maximum potential when used collectively. It is possible to maximize rental income if you follow these simple tips!
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