Every investor wants a good return and property owners are no exception. A portfolio of rental properties can yield good income but the best measure of how well your investment is working for you is the ROI. Your return on investment is a good indicator of how healthy your business really is. The best part is that you can start improving your ROI right now without investing in more properties.
1. Be Competitive With Your Rent
The best thing you can do for your ROI is to be competitive when pricing your rent. Going too low means you’re short changing yourself and missing out on potential income. If you go above market average you will likely have a high turnover rate and find yourself struggling to attract tenants. Vacant units cut into your profit margin.
2. Add Square Footage
Increasing square footage is a reliable way of improving ROI and it doesn’t have to be as costly as it seems. People usually associate adding square footage with building an addition but you can keep it simple and still get a good bang for your buck. Consider finishing basements and attics and convert porches into sunrooms or mudrooms.
3. Do The Right Renos
When doing renovations, focus on broken and dilapidated items first as these issues can turn potential tenants away. Once you address problems it’s time to move on to aesthetic items that will make people fall in love with the place. You are likely to get the best ROI on updated flooring, fresh paint, and new hardware such as cabinet door handles, faucets, and light fixtures.
4. Get Serious About Tenant Screening
Selecting the wrong tenants leads to high turnover rates and damage to your property. These issues negatively affect your ROI which makes a great case for tenant screening. Conduct thorough interviews and ask strategic questions. Pull credit reports, eviction histories, and criminal background checks for potential tenants.
5. Make Better Use Of The Garage
If your property has a garage consider finishing the space and transforming it into useful storage. Add shelving to organize the storage space and hooks for brooms and garden tools. With a small investment you can turn an underutilized space into a desirable and marketable feature.
6. Get It Clean
The most cost effective way to improve your ROI is with a thorough cleaning. Potential tenants will appreciate a clean unit that is fresh and inviting. Cleaning your rental property is as easy as gathering up some supplies and devoting a few hours and some elbow grease to getting the place looking and smelling clean.
7. Rev Up Your Marketing Strategy
Take some time when creating your listing and come up with a creative and detailed description for your listing platforms. Consider the features of the property and what tenants are likely to be looking for. More people are working from home. Why not advertise a den as a home office?
Don’t forget to include quality pictures. Prepare the space by removing clutter and staging empty rooms. Let as much natural light in as possible and turn on the lights. Use quality equipment that can take good photos instead of blurry and grainy ones.
8. Turn The Outdoors Into Usable Space
Increase the amount of usable space without adding square footage by making better use of outdoor spaces. Add a deck or patio to backyards and extend the livable space to include the outside. For multi family properties, invest in the type of communal spaces that your tenants will want to make use of.
9. Embrace The DIY Attitude
Save yourself a ton of money by doing some of the work on your own. Regardless of how handy you are, there are some jobs that you can tackle by yourself. Getting your hands dirty with cleaning, painting, and household repairs may not sound appealing but doing it yourself means you don’t have to pay anyone else to do it for you. Be mindful of your limits and don’t take on jobs you’re not sure you can handle.
10. Go Furnished
Depending on the property and the area, it might be worth considering renting your unit fully furnished. This is a sought after option for those who are just starting out on their own and people who don’t plan on moving to the area permanently. Furnished accommodations are a cost effective option for students or people on temporary work assignments. They won’t need to buy furniture and they can save on moving expenses when it’s time to move on.
Adding basic but modern furniture to your rental property doesn’t have to cost a whole lot but it will allow you to charge more in rent. Landlords can charge on average 15 to 20 percent more rent for a furnished unit. If you’re open to offering short term vacation rentals you can charge 40 to 50 percent more when you rent with furniture.
11. Invest In A New Roof
The last thing a tenant wants to experience is a leaky roof. Neglecting this area of your rental property can cause good tenants to seek new accommodations elsewhere. In some cases, you may be liable to damage caused to a tenant’s property by any water that has gotten in due to negligence.
Water damage can cause serious issues for you as well. A small leak behind a wall can lead to rot if it’s left to continue and the damage can be extensive and costly to repair. The moisture can cause mold to grow making the property inhabitable until the mold can be removed by professionals. Avoid all these hardships and expenses by keeping the roof in good shape at all times.
12. Get Organized
Managing multiple properties comes with a unique set of challenges. It’s important to be organized, keep accurate records, and compile useful data that you can leverage towards improving your ROI. The right software that is customizable and user-friendly can help you run your property management business more effectively and make it easier to spot areas that need improvement.
13. Don’t Neglect Curb Appeal
If the outside isn’t inviting, prospective tenants might not make it as far as the front door. Showcase your property with a few simple and inexpensive upgrades. Give the place a whole new look with a new mailbox, light fixtures, and fresh paint on both the front and garage doors. Install or spruce up the walkway and do a bit of landscaping to pull it all together.
Making improvements on how you manage your ROI means making improvements to the operation of your business. Reduce costs associated with maintenance, vacancies, repairs, and renovations while improving the valuation of your property and the contentment of your tenants. Use all the tools at your disposal to make every dollar work for you.