You’ve decided to invest in rental property. That’s a smart decision; it can generate monthly income, and hopefully, the property increases in value over time. This gives you an effective investment plan to give you steady growth of your wealth.
If you find that your investment value isn’t growing the way you’d like, then it’s time to look for ways to improve ROI. These five tips will help you improve the return you have on your rental property investment.
1. Evaluate Your Rental Rates
If your rental rates are too high, it’ll lead to higher rental turnover. This will ultimately cost you more and lower your ROI. Rental rates that are too low result in missed income opportunities.
Regularly evaluate the local market rental rates. Your goal is to get the most out of your rental without pricing your rental out of the market.
Don’t blindly cut your rental rates if you find that they are too high. A smart alternative is to justify the increased rate. To do this, you’ll focus on upgrading the home’s features. This is more cost-effective in the long run because it allows for increased rental rates in the short term and an overall increased property value in the long term.
2. Maximize Local Resources
If you don’t live locally, then it’s expensive for you to continually commute back and forth to manage the rental property. A local property manager will have better knowledge of the local market. They will also have established relationships with reputable contractors.
Your property manager will be able to advise you and enable you to make more informed decisions. This will save you money and time by avoiding costly wrong decisions.
3. Develop Your Marketing Plan
How do you market your rental properties? The more places you promote your property, the more visibility it has with potential renters, and the more likely it will get rented. Many of these promotion platforms are free, which means it won’t affect your ROI negatively.
Working with a property manager can assist with this, also. Your property manager can help you create an engaging listing and then promote it on their website, property listing websites, and social media.
4. Strengthen Your Tenant Screening Process
Finding new tenants for your rental property is costly. Finding quality tenants that pay their rent on time and stay for several years will greatly improve your ROI. To do this, you need to find quality tenants.
Strengthen your tenant screening process to eliminate anyone with a history of not paying their bills, property damage, or generally causing problems. This will reduce the risk of you having to go through the eviction process of making major repairs to the property.
5. Create Additional Revenue Streams
You can offer your tenants additional services and upgrades for an extra fee. This helps you to create additional revenue streams beyond the base rent. Offering additional services increases your tenant’s satisfaction and enjoyment while renting from you.
This encourages quality tenants to stay longer, reducing your overhead. It also improves your reputation as a landlord in the local market. More quality tenants will want to rent from you, further improving your ROI.
Consider offering these additional paid services to your tenants:
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Dry cleaning/laundry
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House cleaning
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Upgraded Wi-Fi
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Dog walking/daycare
Improve ROI by Working With a Property Manager
Your rental property is an investment, and it should be making you a decent return on your money. If your ROI isn’t what you want it to be, then it’s time to make some changes. Start by comparing your rental rates to the local market. It helps to work with a local property manager to help you with a market analysis, property promotion, and tenant screening.
Contact our team of skilled property managers today and let us help you maximize your rental property ROI.
