Maximizing rental income and boosting revenue is one of the major goals of property owners. For some property owners, this may mean outsourcing property management to another entity that will handle all the landlord-related responsibilities. For others with the time, skills, and experience, it may mean managing the property themselves.
However, not all the strategies for maximizing rental income are management-related. Some are built into the property. That is, the property owner invests in quality building materials, systems, and amenities. Take plumbing and drainage systems, for instance.
Installing quality products and doing the plumbing right reduces the likelihood of dealing with leaks or other problems. This reduces future maintenance costs, and also keeps tenants happy (and paying well).
Speaking of tenants, savvy property owners know the value of tenant screening.
Some of the areas to focus on when screening tenants for reliability are their credit history and employment status. This helps you avoid costs related to missed or late payments or eviction. But tenant reliability isn’t enough. Responsible tenants can also save property owners the headache and cost of repairs due to avoidable breakages, as they tend to take better care of a property.
While you can attempt to charge above the prevailing market price, all tenants care about what they receive in relation to the price. When a tenant pays a premium, he or she expects quality amenities and top-tier services. If tenants feel like they’re overpaying and can get a better deal for an equivalent place, they will move.
When setting rental prices, be sure to account for all the costs and expenses. Consider the utilities and bills and all the items that fall under the landlord’s expenses according to the lease agreement and factor them into the rental price. Also, keeping utility expenses to a minimum when a property is vacant can help to boost income.
Property management can be a lot of work, costing not just money but time, if not done well. Property owners who could make better use of the time they’d spend managing their property may prefer to hire a property manager. Some leverage technology to automate repetitive tasks, such as financial reporting, rent reminders, and collection and maintenance requests.
A watertight rental agreement can help avoid expensive legal consequences. Putting each party’s roles and responsibilities in writing helps avoid misunderstandings that can disrupt income, such as late rent payments. Also, it helps to have and enforce the late fees rule, ensuring rent is paid in full and on time.
When hiring a property manager, remember that they can help reduce vacancy rates, thus maximizing your rental income. The wrong property manager can, however, hurt your rental income prospects. When hiring a manager consider their expertise in dealing with people as well as their grasp of tenancy laws and accounting.
Savvy property owners understand that tenants are paying for more than just the housing and amenities. They are also paying for prompt and efficient service. So not only do they strive to keep their property in excellent condition, they also ensure they maintain good relationships with their tenants, regardless of who is managing the property.
