Maximizing Rental Property Income
Congratulations! You’re in one of the most exciting areas of business going today — rental property management. And it’s potentially one of the most profitable.
In an era of potentially rent controlled, overpriced single family homes and multifamily apartment markets, how do you ramp up profit? A lot of the advice you get online zones in on micromanagement of issues such as reducing maintenance call time, improving NOI a little, and hanging onto your tenants for another month.
That short-sighted approach isn’t one for investors, and won’t work well for landlords or property managers either. Instead we need to look at property management as a business just like investors would. Enter a new world with a foundation of technology, management software, and savvy income growth strategies, and your NOI and ROI will grow.
Big Profit is There If You Take It Seriously
Let’s not understate the potential of rental property income and building the value of your property portfolio. While opportunities for fixer uppers, jaw dropping rent increases, and big capital gains tax savings might be gone with the wind, there are plenty of better ways to make solid, sustainable profits from your property holdings.
First, let’s look at 5 main ways you can grow your revenue and then afterward, uncover 10 tactics to ramp it further:
5 BIG Ways to Grow your Profit:
- manage your portfolio yourself and use property management software to automate payments and maintenance, help educate, and to connect with and keep tenants involved with you
- be adventurous and buy more and better quality properties wherever they’re located in the US, Canada or Central America
- think long term with tenants and home quality – make key improvements based on what renters really want or are impressed with
- buy apartments in luxury multifamily condo buildings in the right neighborhoods and locations such as near key intersections in walkable neighborhoods
- optimize your online marketing to grow your renter connections and be able to ask for the highest rents possible
Investing in Your Property Management Business Means Spending
Cutting costs is not in this mix. Cutting costs is the first sign of a business heading into a downward spiral to nowhere. Finding the best properties, being strategic and spending smartly creates more potential revenue. Given the current market for rentals, the upside is strong. Buyers and renters will pay a premium for a good property.
Planned growth is a wise strategy and it can be managed with software and some advice on which to choose. You’ll benefit from improving how you hire contractors, screen tenants, and create living environments that your tenant won’t want to leave.
Do It Yourself, Professionally
Unless you have hundreds of properties, a landlord can’t get rich hiring a property management firm. The potential lack of care and mismanagement risks are an issue, and the costs eat too much into your profit. Property management firms can change and erode the tenant relationship and they may not do enough to keep tenants in their units long term.
DIY. By growing and showing you can manage growth and improved profit on your own, you’re more likely to find investment partners to help you access another higher level of real estate investment ROI. You might be able to buy a Class B property in an upcoming neighborhood in your city or another city for truly awesome profit.
Location, location, location. Yes, choosing the right buildings near transit, in high walkability neighborhoods, and low crime areas will be more attractive to renters in the years ahead. So giving it up to a good property management company might be unnecessary. You can do this.
11 Ways to Ramp up your Rental Property Revenue
- buy more rental properties – buy higher quality properties with better long term tenants is where the big profits are (we’ll cover property selection in another post)
- study the rental income markets in each city – don’t be afraid of buying and managing properties in other lucrative cities in the US or abroad
- manage the portfolio yourself – hire an assistant for accounting, software admin, and become your “mini me.” Consider letting them do the lease rental agreement signing, and onboarding, so you have more time to get the key stuff done.
- think long term – buy quality properties with potential in recession-proof regions is wise at this point and which no one else is doing
- upgrade with tech amenities – check out some new services which tenants really want
- buy a fixer upper in a low priced region – one risky high return property is something you could manage well enough
- increase the number of properties gradually – buy in bulk the home improvements renters and buyers actually care about including solar panel systems, energy efficient appliances such as tankless water heaters, big windows, beautiful kitchens, and nice flooring.
- conduct internet marketing really well – and grow the number of connections who want to live in your units – that increases demand and minimizes periods where a unit is vacant. Use a blog and facebook page as a portal for all your tenant connections. It will deliver ever-increasing value through the years ahead. And you can use paid advertising more effectively and get better ROI.
- minimize vacancy causing issues – understand more about why units become vacant because it is a serious loss
- visit your tenants and ask them what they’re disappointed with in the unit and neighborhood and which neighborhoods they like and give them some free LED light bulbs and a bottle of wine – show that you care!
- sell your lowest performing property and buy a better one. Rotate the losers out. It will be too much work to keep that unit going. Just not worth it.
Which Revenue Building Tactic Will Work Best for You?
As you choose each of these improved tactics as part of a long term revenue and tenant focused strategy, you’ll discover which performs best. If you utilize even a couple of them, the long term value will make you smile.
What this actually is, is a process of improving how you do business. A consistent focus on reducing workload via property management software and via a landlord app means you eliminate the paperwork and maintenance overload.
The profit is there, if you can get the time to do the things that create the biggest revenue growth. But if you’re toiling with micromanagement, tomorrow looks a lot like yesterday.
Let us know what you’ve found to grow your revenue the most. We’d love to hear from you.
Good luck with your rental property management portfolio and choosing the best property management platform to make it all go smoothly in 2020. If you haven’t take the ManageCasa property management software for a test drive, then try it now while you’re in the mood. You’ll discover why simple makes so much sense.
See also: Management Software | Growth Hacks | Renter Demographics | Tax Tips for Property Managers | Real Estate Portfolio Tips | Starting a Property Management Business | Tenant Screening for Landlords | Increase Investment Property ROI | Improve Property Cash Flow | Property Management Contractor Scams | ManageCasa Property Management Solution