Competition constantly rises between rental businesses in cities and in rural areas, forcing landlords to quickly adapt within a fast changing market. Here are ten steps to stay up-to-date and make your rental business more profitable.
#1 Research the Rent Price around Your Neighborhood: It’s important to regularly update your rental price. After you add new renovations such as fixtures, kitchen cabinets and cable service, you need to increase your rent to make a profit. However, the rental price has to match the market price in order to be fair to your tenants – especially the ones who have been living in your rental property for multiple years.
#2 Require a Screening for All Applicants: A great way to sort the good renters from the bad is to host individual property showings, as it will provide time to get to know the applicants before they sign a contract. You should also make it a requirement for potential tenants to fill out a rental application that includes the information needed for you to verify their income. It’s a good idea to contact a potential tenant’s prior landlord to learn about previous behavior, and perform a resident credit check and a criminal background check.
#3 Keep Your Rental Property in Good Condition with Preventative Maintenance: To keep your rental property appealing to customers, you need to keep the place in top shape. To do so, consider hiring a thorough maintenance team that will upkeep the property proactively. This will help increase the value of your property in the end, and prevent any costly surprises.
#4 Implement a Written Rental Agreement: Having a written rental agreement will prevent protect against disputes in the future. A detailed list of the responsibilities between the tenant and the landlord will make sure both parties are on the same page.
#5 Late Rent Policies Need to be Enforced: Be respectful, but make sure your tenants are aware that you’re running a business. Kindly remind them about the terms and conditions in the signed contract, and the need to abide by said leasing agreements. Make your expectations clear in the beginning so there is no confusion later down the road.
#6 Amenities, Amenities, and Amenities: Yes, it will cost money upfront, but it will pay off in the end. You need to stand out from your surrounding competition by adding amenities your neighbors don’t have—a pool, a gym, a washer/dryer unit, etc. If you put your money into amenities, your tenants will spread the word, making your business flourish above competitors.
#7 Upgrade to the 21st Century: No one wants to pay by check anymore. The digital age has arrived and tenants want to be able to pay their rent online. Take the time to set up a new, easy-to-use website and a system that allows for online payments. This will make paying rent easy for your tenants and for yourself.
#8 Offer a Free Month of Rent: Provide an incentive that cannot be refused such as one or two months of free rent if your tenant agrees to sign a fourteen-month lease. Be sure to research the deals and offerings from competing rental businesses to make your property more appealing.
#9 Hire Trustworthy Employees: Hire employees to help run your property and keep things operating smoothly. A friendly front desk employee can save you time and phone calls by helping your tenants with any issues or problems. Hire a property manager or landlord to see over the finer details of your property. Also,if your schedule is busy, consider hiring a real estate agent or tour guide to help sell a unit to potential tenants. Security guards will make your property feel safer, and are a good idea for multi-unit complexes, but remember that lifeguards are a must if you have a pool.
#10 Add Revenue Streams onto Your Property: You can add a convenience store to your rental property to increase your income, as well. You’ll see a profit if your tenants need to do some last minute shopping and can purchase from their convenience store instead of traveling down to a local CVS or grocery store.
Competition is strong in the rental businesses. Landlords need to be aware of competitive threats, and do a thorough job researching the market. But remember to take small steps, and not to make too many changes at once.Monitor your progress and perform tweaks when necessary. Follow these steps and you will inch closer to your goal of a more profitable rental business.