It’s easy to see why so many landlords are intent on making their respective properties maximally profitable. After all, considering what a large investment the average rental represents, it’s only natural that property owners would want to see massive returns. However, in order to generate these returns, you’ll need to put forth consistent effort and never assume success is a guarantee. Landlords looking for ways to keep their rentals profitable for the foreseeable future can benefit from the following tips.
Seek Out Insightful Knowledge on Rental Property Ownership
Purchasing your first rental property without taking the time to get educated represents a huge gamble. In the absence of the proper knowledge, fledgling investors are liable to make some very poor decisions with their money. So, before you start putting down serious offers on assorted rentals, take care to seek out insightful knowledge on rental property ownership.
You can start by talking to the people in your regular circle of friends, relatives and general acquaintances. If anyone in your life has experience owning and/or maintaining rental properties, there’s no time like the present to ask for practical advice. Should this not prove feasible, you’d do well to reach out to a dedicated real estate investment company. In addition to teaching you the ins and outs of locating and maintaining profitable rentals, experienced investors will be able to provide useful answers to the question “How does rental property depreciation work?”
Treat Maintenance with the Utmost Importance
Without proper maintenance, even a nice property in a good locale is liable to drop in value. Furthermore, failing to stay on top of maintenance stands to draw the ire of tenants, many of whom may be inclined to withhold rent payments and leave negative feedback online. A lack of attention to maintenance can also result in serious fines, expensive lawsuits and other legal consequences.
In short, there’s no benefit to letting maintenance fall by the wayside – for you or your tenants. As such, make a point of addressing any maintenance requests that come your way in a timely manner. The sooner you get on top of a maintenance issue, the less lasting damage is likely to be done to the property and your professional reputation. Additionally, make sure that any repairs or renovations – no matter how minor – are tackled posthaste.
Be Attentive to the Needs of Renters
If you develop a reputation for ignoring the needs of your renters, you may find that you have trouble attracting interest from new rental applicants and convincing existing tenants to renew their leases. Since many renters put a sizable portion of their monthly income towards rent, it’s only natural that they would expect landlords to make themselves reachable and be attentive to their needs.
That being the case, you should actively encourage tenants to come to you with any questions, concerns or requests they may have. By extension, make sure to provide each of your tenants with a work phone and email at which you can be reached during the day, as well as an emergency number to call in response to maintenance mishaps that spring up outside of regular business hours. The more attentive you are to the well-being of your tenants, the higher your renter retention rates – and overall profitability – are likely to be. Providing various avenues for communication and being responsive are certainly key elements to maintaining a good landlord-tenant relationship, which in turn can increase renter retention rates. Another way to cater to the needs and preferences of your tenants is by offering diverse payment options, including the ability to pay rent with a credit card. In our increasingly digital age, many people appreciate the convenience and flexibility that comes with electronic payments. Credit card payments also offer the advantage of allowing tenants to build credit or earn rewards, and it can be a helpful option for those who may be temporarily short on liquid cash. For landlords, accepting credit cards can expedite the payment process, reducing the time spent waiting for checks to clear or handling cash payments. However, it’s important to note that credit card companies charge fees for their service, so landlords must decide whether to absorb these costs or pass them onto the tenants. Offering a credit card payment option, even with the associated fees, can be viewed as an additional amenity that could make your rental property more appealing to prospective and current tenants.
Have a Robust Screening Process in Place
Even the finest rental property can’t generate returns in the absence of tenants who pay their rent. Fortunately, you can reduce your odds of taking on high-risk tenants by having a robust screening process in place for all rental applicants. A good screening process involves taking a close look at an applicant’s credit, rental history, criminal background and income situation, as well as contacting any references they provide. If you lack the time or energy to personally screen rental applicants, consider enlisting the aid of a dependable screening service.
There’s little wonder as to why rental properties are typically regarded as smart long-term investments. The right rental property can generate passive income for decades – which explains why some rentals stay in families for generations. Still, this shouldn’t be taken to mean that all rental properties are guaranteed money-makers, and if long-term profitability is what you’re after, you’re going to have to put in some work. Fortunately, with the pointers discussed above, this shouldn’t prove terribly difficult.
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