The rental market becomes more and more competitive with each passing year, and with that means more opportunity for profit. If you’re a landlord and looking to increase your bottom line, these strategies and investments can make your business venture more lucrative than ever.
Reconsider Your Advertising Techniques
If you want to attract higher quality tenants, you’ll need to use the right avenues to reach out to them. Fliers and posters are a thing of the past, and if you want a better pool of candidates to select from, you’ll need to head to the Internet. Many landlords stop at Craigslist, but this can be a surefire way to attract scammers and bad tenants. Use a certified website like hotpads.com or padfinder.com. While these sites do charge a fee to post your listing, you’ll have access to a wider, more legitimate pool of searching renters. Once you have this pool of candidates, always follow tenant screening processes, and look into the backgrounds of strangers you’ll allow to live in your property. This will give you the essential information you need to make a decision; from past evictions to criminal history to credit scores, you’ll be more assured of landing yourself a quality tenant.
Keep Great Tenants
Consistent vacancies will deplete your income in the blink of an eye, so it’s in your best interest to find tenants looking to stay long term—and keep them happy. Turnover is more expensive than you might think. When you combine the loss of rent for however many months your property stays empty, update costs, cleaning costs, and maintenance, you’re looking at spending a small fortune. For some landlords, long term tenants are just not a viable option, i.e. the heavy turnover that comes along with college towns. There are ways to circumvent your losses; enforce a 60-day notice policy in which your tenants have to notify you of intent to leave. Once you have this notice, post an advertisement announcing your upcoming vacancy immediately. Keeping longstanding tenants might see you tweaking your rental rates. Consider lowering rental rates to find loyal, long term renters, as netting smaller rental income each year could offset the costs of rental turnover.
Enforce Late Fees
The best thing you can do for your rental property is to enforce late fees and remain rigid in your lease-stated guidelines for renters. It’s understandable to want to sympathize and allow for late payments (life happens) but allowing tenants to take advantage of the system will only see you losing money. Your rental property is a business, so it’s essential that you treat it like one.
Add Communal Services
If you own a multi-unit property, consider making communal services an integral part of your rental strategy. Younger generations, specifically millennials, are searching out communal spaces in the places they rent. This idea of community might mean adding services that will gain you more money—think coin-operated laundry machines, vending machines, and the like.
The Pack Mentality
You can make your property more desirable with a little bit of open house strategy. One easy (and free) way to do this is to exploit humans’ natural propensity to follow the pack. Instead of organizing various appointments to show the place, let all of your candidates come in similar time frames. This will give your property an air of desirability, and nothing drives up profits like competition—especially in the heavily saturated rental market. If you’re worried about being overrun with visitors, have a friend running backup to help you give every potential renter the attention they deserve and prepare them with answers to questions that might arise.
You won’t secure higher-paying tenants without giving your rental a facelift. Simple cosmetic changes can mean a world of difference for your property’s curb appeal, and may justify an increase in your rent requirements. Highlight the things that your property provides, including proximity to schools, restaurants, bars, and public parks with a flier for visual retention. Never schedule showings on garbage day (what could be more off-putting than the stench of the whole block’s trash?) and get the property professionally cleaned before showing it to potential renters.
Making your rental property more lucrative doesn’t have to mean shelling out a fortune on updates. Utilize these strategies to make your rental business more profitable than you ever thought possible.