If you own rental property, it's probably safe to say your number one priority is maximizing the income generated from that property or portfolio. Below, we'll discuss four impactful ways to make your property or rental portfolio more lucrative without overcharging your tenant.
As a rental property owner, you must know your property's rental rate per day. This is especially important when it comes to vacancy. The largest killer of optimized rental income is a property sitting vacant. Maximizing your rental income starts with a shift in your perspective to view vacancy as a per-day cost.
Let’s look at an example. Imagine you have a property that is rented at $1,800 a month. That property generates $60 daily in rental income, which translates to a minimum of $60 daily loss. And that number doesn’t take into account additional costs like utilities and maintenance.
First and foremost, the key to maximized rental income is avoiding vacancy and speeding up the make-ready process so you can turn properties quickly and limit your vacancy per-day cost.
When you receive a maintenance request from your tenant it is imperative that you provide fast, high-quality repairs. Many studies have found that poor quality maintenance is the number one reason good tenants choose not to renew. By delivering quality maintenance to your tenant during their lease, they will be much more inclined to renew. All of this boils down to you limited your exposure to the top rental income killer -- vacancy.
To put it simply, don’t pay for utilities. While it often comes from a good place, paying for utilities is an unnecessary cost and one that can be easily avoided. Optimize your rental income and have your tenants cover the property's utility costs.
- Rent Increase
Don’t be afraid to increase your rent when lease renewal time comes around. You never want to lose a good tenant because of a rent increase but as your own expenses increase, you are justified to adjust your rents accordingly. That said, don’t overdo it. A modest increase is okay but if you raise the rent too egregiously, be prepared to have a good tenant leave. The result will be more costly as you scramble to turn the unit and pay the vacancy costs while it waits for a new occupant.
If you have additional questions about optimizing your rental portfolio or any other property management need you may have, our team is happy to serve as a resource for you. Give us a call! 303-255-1990