As a real estate investor, your number one goal is to increase the return on investment or ROI on every property you currently own or will own in the future. However, there is no single method that works on every property as there are many factors that play into the value of a home: location, market data, future value, etc. With that being said, there are still some fundamentals you should know that can be applied to your rental properties to increase the ROI that are listed below.
Imagine you are attempting to sell a prospective renter on the idea of a vacant home that is not furnished with the basics including appliances or not finished. No one would rent a home in such a condition! It is imperative that you prepare your property for a showing by doing the following to increase a prospective tenant’s initial opinion: clean floors, remove personal items, maintain the yard, and complete any repairs or maintenance at a minimum. A clean property presents well from first glance which is often through pictures online these days, so make sure to clean and light the unit well first, then take clear bright pictures. And, if you are showing the unit live, it is always a good idea to make sure the place smells nice!
Use marketing to your advantage:
As the classic saying goes, “if no one knows about your product or service, no one will buy it.” The same holds true for your rental properties. If no one knows about the rental properties you have, no one will be actively seeking out your rental property. Due to the industry being somewhat saturated, traditional forms of marketing will not work as effectively as if you were to be creative with other forms of marketing. For example, targeting specific businesses in your area and advertising a flyer with information on your rental property is more useful than a billboard ad. Even though the billboard ad would target a larger audience, it wouldn’t target the right audience effectively. And these days with so many online platforms for soliciting tenants for rent, you really need to stay on top of all the free services available and make sure when you list a unit for rent that you submit your information with every site available. The goal is to see enough candidates that you can pick the very best one, within the rules, as soon as you possibly can!
Retaining tenants is key:
One of the most difficult things to do once you have established the two above is to retain the tenant once you have them. Since everyone is looking for the cheapest place to rent, offering incentives for your tenants for paying on time or simply maintaining the condition of the property from when they first moved in will convince your tenants to stay longer and feel special. The number one tenants say they leave a rental is because they dislike their property manager or landlord and the number one reason for that is because the unit is not properly maintained. If you keep your tenants happy by responding to their phone calls and addressing maintenance issues as they come up, you are putting yourself in the best position to retain that tenant and thus, improve your ROI by avoiding a tenant turnover which results in additional maintenance expenses, leasing expenses and lost revenue while the unit is vacant.