You are in the real estate investment business for a good reason: profit. Although, like in any other business, the road to high and stable returns is challenging. There are many pitfalls along the way, some of which you can avoid by continuously monitoring the market, introducing efficient management practices, and making changes that will help you achieve your financial goals.
Here are four tips to help you maximize your earnings. Some of them may sound pretty obvious, however, many of our peers forget about these simple rules and miss out on profit opportunities.
Cash IS king. But….
When you want to increase the profits on your rental property, the first thing you do is increase rent prices, right? Hold on…not so fast. You might want to update yourself on the lease prices and overall rental market in the neighborhood first. No, you don’t want to run at a loss. That said, you also want to avoid having your property remain empty for too long. Analyze, compare, and then offer.
Look for long-term tenants and invest in building a good relationship with them
Turnover can be quite a drain on a budget. Long-term tenants save you money and trouble on advertising and ensure that your home doesn’t stay empty. While happy long-term tenants tend to take care of the property better and pay rent on time, they are also usually more flexible if you need to renegotiate leasing terms.
Add some extras!
There are many things that your tenants need and are willing to pay extra for: house cleaning services, vending machines, lawn care, coin-operated laundry, quiet office space, etc. Think about what may appeal to your tenants and provide it. Additional services will bring you an extra income on a monthly basis.
Do routine maintenance
Maintenance jobs must be addressed regularly to ensure the property stays in good shape for as long as possible. It is much cheaper to stay on top of maintenance needs than perform a major repair when things go bad.
Make sure your rental agreement outlines who is responsible for performing seasonal inspections. It is also a good practice to keep the contacts of trusted contractors handy in case you need to fix something urgently. This way, if the tenant calls you with an emergency, you won’t be calling around trying to find available help at a reasonable price.
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Take time to evaluate which processes you can improve. Make an effort to discover and adopt the best rental-management practices for your business. Sometimes even small changes can make your property more attractive for tenants and thereby more profitable. A proactive approach will save you trouble and help you make money in the long run.
Lastly, if you ever need funds for your next real estate investment project, Lending Bee is always prepared to help. Our underwriting and processing departments work 24/7 to verify and close deals within 5–7 days. Since every business is unique, we can negotiate the terms of the deal so everyone benefits.