If you run a rental property, you aim is to make it as profitable as possible. You don’t have to keep acquiring new property to make your rental efforts more rewarding. Instead, we’re going to look at the assets you have already and see how to get more money without having to invest too much.
Lessen the impact of vacancy and turnover
The longer your property is vacant, the longer you’re paying the overheads without any income. Similarly, a vacancy can be extended by turnover periods, which also add the costs of advertising and maintenance in-between tenants. You can reduce vacancy and streamline the process of welcoming new tenants with the help of a property management company. Not only will a little help take some of the work off your hands. They also have an already-built marketing process and access to a market of already-looking tenants that can help you get someone reliable in the home more quickly.
Consider offering extra services
You can create revenue streams within a revenue stream by offering additional services to tenants for additional payment. This can include offering to take care of the garden or clean the house for an additional monthly fee. Other landlords will add things like coin-operated laundry machines, but this can turn off prospective tenants. Choose the services that don’t seem to subtract value from the home, but add value to the tenant’s relationship with you.
Don’t be too merciful when it comes to late payments
If a tenant is late with the rent, you should remind them of it as soon as possible. You might be inclined to give them the benefit of the doubt and offer a couple more days without a prompt. However, sending a reminder has been shown to increase the rapidity with which tenants get caught up. Just as important, don’t neglect to apply late fees. Tenants need to understand they are in a financial agreement with a business, and that they are responsible for fulfilling their end of that agreement. Pairing with a letting agency can make the process much more efficient. You can have them the letters and charge fees on your behalf, too.
Know when you have to increase the rent
Property is not immune to the effects of inflation. If you are not increasing rent from time to time, you will inevitably reach a point where a property costs you money, instead of helping you profit. You should increase your revenue by 1-3% each year. Finding out exactly how much you should raise it by depends on the nearby market. You have to remain competitive. Many landlords are afraid to raise their rent because they believe tenants will jump to a new rental as soon as they find a cheaper one. However, remember they also have moving costs and other fees that can make such a jump impractical and be a little more confident in your ability to reasonably increase rent.
Hopefully, the points above give you some idea of how to make your properties more profitable at the same time as making it easier for you, the owner, to manage. There are more ways to scratch out extra profit from your properties, so use the ideas above as inspiration and keep doing your own research.
Also published on Medium.