12 Ways to Grow Property Revenue
What if you adopted a rental property investment strategy that could make your tenants happier and willing to pay you more? Sound like a win win outcome?
If you’re like most property investors or managers, you might be thinking that more properties might be the route to higher rent yields and improving cash flow. The old adage that less is more might be one to consider.
A recent survey on tenant attitudes showed 63% of tenants are okay about a rent increase and are willing to pay a higher rent price if certain amenities or services are offered.
More is Not Always Better
Going from 6 to 12 properties for instance, may double your revenue and ease some of your costs. So it’s hard to argue that volume is one way to grow your cash flow and increase your equity. However, there’s also a few problems with that logic.
Maximizing the return from let’s say 75 properties is more difficult since each has its own situation, circumstances and potential. That’s why property investors and property managers insist on streamlinging property types/locations and considering bringing property management functions in house. That can raise risks too.
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With fewer rental properties you can hone your business strategy and create bigger gains through marketing, negotiation and rent increases. Then you’re ready to move onto more properties.
It’s hard for renters to argue today that their condo or apartment isn’t worth it. And more renters competing for your single property may boost the rent considerably. Just add an insuite laundry, free wifi, amazing appliances, and online tenant apps and they’ll be counting their lucky stars they’re renting with you.
Tax Cuts and Jobs Act Changes the Playing Field
After the recent tax bill, you may have discovered you’re more disadvantaged with tax writeoffs. You’re considering divesting some assets deal with things. But hold on. More earnings is always the better route to ensuring your investment works and that’s where marketing and tenant screening comes in.
The Power of Better Tenant Search
If your property offers the tenant a convenience, comfort, security and amenities, it’s worth it for that happy tenant to pay more. And in a high demand market, the incentive is there for you to reach higher quality tenants (including babyboomers) who will pay even more.
Advertising + Good Tenant Screening is money in the bank.
6 properties x $300 additional per month x 24 months = $43,200
Take a good look at rental properties similar to yours and model your promotional strategy to mirror the value those units provide. Why are tenants willing to pay so much for those units? Prestigious location, convenience, transit, parks, amenities, near to work, safety, or great views?
How much further investment in improvements will it take to get your unit up to the level of the better ones available?
Use whatever great features of your property you have that draw tenants and then maximize them in your marketing and advertising. Remind tenants of why they should want to live there.
With rents rising so fast, and with a dearth of available units, your condo or apartment property is very valuable. Besides substantially improving income, you can pay down your mortgage, make repairs to the unit, and you will increase its attractiveness to other investors should you consider selling.
Rent is an Estimate and Negotiation of Value
The rent you charge is your estimate of the value of your rental property.
Your property manager or real estate agent may be able to negotiate a higher price if they have the volume of interested tenants. But often, they receive a lower numbers of applicants and of lower income and quality. That happens when they’re advertising in the wrong places such as Craigslist which could attract a lower income applicant whose desirability as a tenant is lower.
12 Tactics to Get a Better Tenant
Many realtors don’t have an extensive contact list or marketing presence. They may not do a good job of attracting A+ quality tenants. And those are the tenants you must have for easy, sustainable rental income. They will stay and pay more because they can.
- Take stock of competing apartments in your building or neighborhoods, your rental “comps” to understand their strengths and how to position your unit against them.
- Promote the quality of the neighborhood
- Talk about how in demand this neighborhood and building are
- Convenience factors such as retail stores nearby
- Take awesome photos – go first class all the way
- Word your promotion and landing pages to appeal to your intended audience. But don’t go overboard which is a red signal to renters. Instead be sincere, transparent, and generous in information so they know they’re not wasting their time
- After establishing a base price, gear the full rent to the person’s credit rating
- Hire a marketer to create massive visibility of your properties, particularly online with a website and Facebook presence
- Improve your units/properties (insuite laundry, free wifi, and add tenants apps, because you’re negotiating price based on value to tenants and you can justify increases based on improvements
- Renovate your unit to make it sparkling including the bathroom and kitchen
- List all the reasons why you must raise the rent – taxes, fees, HOA, repairs, insurance, new appliances, etc.and give them 4 months notice
- Tell the tenant you’ll provide free professional carpet cleaning
The Final Word on Raising the Rent
It’s not all about negotiation. Before meeting tenants, be sure why your rental property is worth a better price. Know what your prospective tenants are comparing your unit too. Like a realtor, know the comps.
Yes, you’ve heard it many times, but bake your unit better. List all the reasons why it is, and communicate that value to your tenants subtlely.
Good marketing strategy is your most powerful tool. You’ll get a higher price from the best prospects from a group of 100, than you will from a group of 10 prospects. Your new tenant will be the one at the top. The bigger and higher the pyramid, the higher the rental price you can get.
Your units have to be worth it. So take pride in the appearance, cleanliness, amenities of your condos, houses, or apartments and be ready to communicate that value to them. Prospects actually don’t have any reason not to believe your rental property is best for them.
To manage all of your properties professionally, choose a simple property management software. Easy to use cloud-based rental management software makes it easy to stay organized, cut paperwork chaos and improve property accounting and tenant relations. Review the benefits of rental property management software now and take it for a FREE test drive.
You’re going to feel much differently about how much you can grow your rental property income and how wise you are to choose property investment. ManageCasa is a wonderful and simple solution for landlords, tenants and you.
See also: Account Software | California Property Management | Airbnb | Best Property Management Software | Property Management Company | Landlord Apps | Property Management Apps | California Housing Market | Grow Investment Property Revenue | Investment Property Cash Flow | Property Management Scams | Tax Tips for Property Managers | How to Use Property Software | Real Estate Portfolio Tips | Starting a Property Management Business | ManageCasa Property Management | Tenant Screening | Cloud Software