Real estate has been a lucrative investment for savvy investors for years, but as an increasing amount of Americans are choosing to rent instead of purchase, landlords and property owners have the opportunity to bolster profits and make the most of their rental. If you’re looking for strategies that will allow you to improve your bottom line in your real estate business, take note of these tips.
The Importance of Curb Appeal
One of easiest cosmetic ways to up the value of your home is to improve curb appeal. Invest money into your landscaping, and consider planting trees in the front yard and along the street. Not only will this help attract high-quality clientele that are willing to pay a bit more, you’ll add value to your property and save money in one fell swoop.
Adding a mature shade tree from BigTreesToday.com to the front of your home can reduce a home air conditioning bill by up to 50 percent, and in cold conditions, help retain heat. If you do decide to sell your home down the road, the addition of a single mature tree can add up to $10,000 to the home’s overall value. Tenants will only pay more for a property they deem worth it, and curb appeal is the first impression you’ll make. Perform any necessary repairs, hire a professional paint company to redo the exterior, and replace any old appliances.
Offer Community Services
If you’re renting out an apartment complex, you likely know how much community services and amenities can entice a potential renter. To build revenue, you might offer services that will allow you to supplement your rent income.
You might offer coin-operated laundry machines in a common area of the complex, hire cleaning services that tenants pay for (included in lease), or purchase a vending machine to augment your profits in a single month’s time. Many tenants will be willing to pay a bit extra for amenities and features they won’t find in other rentals, so it could be worth the initial investment.
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If you want to make more money over time, it’s important to avoid tenant turnover like the plague. Vacancies can cost you a month or more of rental income, so it’s important to decrease vacancies by attracting great prospective tenants and turning them into long-term renters. It starts with running thorough background checks that cover more than credit score.
Use a service like MySmartMove to receive information on criminal history, evictions, and credit to make a more informed decision. Once placed, you’ll need to maintain a great relationship with your tenants, being responsive to their needs, and giving them enough reason to want to stay. Make your property a standout and your relationship strong through professionalism and courtesy that you’ll see returned to you tenfold.
There’s more reason than loss of rent for a month to avoid turnover as much as possible. When one tenant moves out, you’ll need to spend money on advertising, repairs including painting and flooring, and multiple other expenses that are involved with preparing a place for rent.
Even if you can’t ensure your tenants stay long-term, you can decrease the time between vacancies by enforcing strict notification policies and finding a new replacement tenant in that time to ensure a seamless continuance of rent check coming in.
Always Enforce Late Fees
While it’s human to be empathetic to renters who got their rent checks in a week late, this is bad business practice. If you allow a tenant to get away with paying late without enforcing a penalty fee, you’re essentially throwing money away and setting yourself up for similar situations in the future.
If you enforce your late fees from the get-go, tenants will understand the ramifications, and you’ll either always get rent on time or receive a little bit of extra money for your patience.
Your rental property is a business, and if you want to enhance your profits, it’s important to invest the time and money into practices that could see you expanding your income. From curb appeal updates to turnover avoidance strategies, you’ll find your efforts are more than worth the effort.