The goal of any real estate investor is to make money on their rental property by earning a healthy return on investment – ROI; that’s the whole reason for investing.
Rental properties can make great investments, but if you’re not careful, it’s easy to lose money on the property. Smart investors know that a great ROI depends on having the right property, the right tenants, and the right professional property management help.
Advantage Property Management Services manages both single-family and multi-family rental investment properties in San Francisco’s East Bay, serving cities in Alameda and Contra Costa counties, including but not limited to San Ramon, Danville, Pleasanton, Livermore, Dublin, Castro Valley, and San Leandro.
Tenant Retention and Avoiding Vacancy
The best way to increase your ROI is to keep the rent coming in with a good tenant in place. You’ll also need to keep that tenant for as long as possible as turnover hurts your bottom line and vacancy is expensive.
Avoiding tenant turnover or a prolonged vacancy starts with the initial screening process by looking for a tenant who will pay the rent on time and take good care of the property.
As covered above, you find great tenants with thorough application screening, previous landlord references and by running credit and background checks. A property management company will do this for you.
Landlords Who Are Managing On Their Own
DIY landlords face special challenges when trying to increase their ROI. You must treat your rental as a business because that’s what it is. Many self-managing landlords or property owners make the mistake of developing personal relationships with their tenants with the hopes they will take better care of the property; this is usually not the case.
Keep in mind too, it is easier to raise the rent or evict tenants who are not your friends. Keep the relationship respectful, professional and businesslike. If you find you don’t have the personality to detach yourself emotionally from your property or tenants, hire a professional property manager to do these things for you.
A good property manager also has relationships in place with vendors with an eye to keeping your maintenance costs down and turning the property quickly, saving both time and money which in turn helps your ROI.
How Professional Management Increases ROI
A professional property manager can generally get your property rented more quickly as they have the management expertise to advertise the property in a way to attract great tenants. They also know how to screen tenants and get good ones into the property, sometimes faster, less expensively, and more efficiently than a DIY property owner which can all add to the cash flow and bottom line of your property.
A property manager can also save you money with preventative maintenance while keeping an eye on your investment. They make sure the property is well maintained, fixing the small problems today so they will not become larger, more expensive problems in the future.
Earning More ROI: Some Tips
Preventative maintenance is a good way to ensure you protect the condition of your asset and increase its ROI. For example, make sure there’s fresh caulk around the sinks and showers. This simple and inexpensive fix can save you from more extensive water damage to the walls and flooring. Check every angle stop valve in the property by turning them off and then back on. If they won’t turn off or leak when they are off, then it’s time to replace them.
Inspect the roof regularly, especially if it’s nearing the end of its useful life expectancy. Roof leaks are very expensive and can cause major damage if left unattended. Clean debris off the roof and, depending on its age, have a licensed roofing company inspect it at least once a year. If you don’t have a relationship with a roofing contractor, find one before you need one.
Have the heating and air conditioning systems serviced and filters changed on a seasonal basis. This is another repair that, if left unchecked, can take a big bite out of your ROI.
If you would like to hear some more tips about how to increase your property’s return on investment, please contact us here at Advantage Property Management Services.