Simple ways to maximize profits on your investment property
|A rental unit with just minor wear and tear should take no more than one week to get ready to show prospective tenants.|
|Photo courtesy of MetroCreativeConnection|
Those who have already invested in real estate know how difficult it can be to maintain a property much less improve it, which should be high on an investor’s priority list. But improving a property does not have to involve a complete overhaul or any other dramatic changes. In fact, there are several simple ways investors can improve their real estate investments and improve their chances of turning a large profit when they decide to sell a property.
- Hire a property management firm. Some real estate investors, especially those new to the business who just purchased an investment and have little money to spare, shy away from hiring a property management firm. But such a company is worth the expense for investors with little time or know-how with regard to fixing a home. A property management firm will ensure the building is kept in shape, and depending on your agreement with the company, may even take care of cleaning vacant apartments, readying them for showing and renting them to new tenants. Perhaps the biggest advantage to working with an effective property management firm is the likelihood they will turn over the vacant apartment quickly, ensuring you aren’t losing money when tenants move out.
- Carefully vet prospective tenants. One of the easiest ways a property can fall into disrepair is to allow bad tenants to move into the building. It’s understandable that investors want to get a building occupied as quickly as possible so they can use tenants’ rents to pay for the property. But bad tenants can cause damage to the property, and their behavior might encourage reliable fellow tenants to find a new living situation. When looking to fill a vacancy, establish a minimum income requirement for prospective tenants and ask applicants to produce proof of income and references from past landlords. This increases the chances you will find a respectful tenant who’s fully capable of paying their rent on time.
- Work quickly. Few people want to rent forever, so expect significant turnover, especially if your investment property is a larger complex with multiple dwellings. If you aren’t working with a property management company, an easy way to maximize your profits on an investment property is to work quickly when turning apartments over after a tenant moves out. This includes painting and cleaning the apartment, and the process should go smoothly if you properly vetted tenants and the vacant unit did not suffer significant damage while the previous tenants were living there. A unit with just minor wear and tear should take one week or less to get ready to show to prospective tenants, and the unit should be vacant for only one month before new tenants move in. Anything longer than a month and you’re losing money you don’t have to lose.
- Upgrade appliances. Renters are just as likely to fall in love with curb appeal as buyers are. While there may not be a yard to entice renters if you purchased an apartment complex, curb appeal can apply to an apartment’s interior. One of the more notable eye-catchers to prospective renters is updated appliances, especially since appliances may be the only items actually in the apartment when it is shown. Stainless steel appliances provide an instant upgrade over older appliances that may appear dated and are certain to make a strong first impression on prospective renters, many of whom would be willing to pay more in rent for a unit with updated appliances. In addition, renters may feel that landlords who took the time and spent the money to upgrade appliances are likely to make a greater effort maintaining the property.
This information was provided courtesy of MetroCreativeConnection.
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