To make your investment properties more profitable, consider these five rental property management tips.
- Inspect your property regularly. Look for unreported items that require maintenance or repair. Also look for signs of tenant abuse, lease non-compliance, and occupancy by residents that are not on the lease (this is usually a lease violation and could result in overcrowding).
- Conduct a market analysis. Conduct a full market rent analysis to track how your units compare to competing rentals in the area. Identify changes or upgrades that could make your property more competitive and generate an acceptable return on investment.
- Review leases. Examine your standard lease document to determine if it has the latest and greatest in legal compliance and liability protection for the landlord. Look at individual leases and forecast expirations and/or rent increases for the coming year.
- Update your financial plan. Effective rental property management requires a written business plan. The plan should include a detailed budget, starting with an analysis of current year cost and income data. Look for ways to cut costs, boost revenue and improve overall rental property profitability.
- Conduct a Keep, Sell or Trade Analysis. Compare the return on investment to be achieved by continuing to operate the property versus selling under current market conditions. Reasons that might support a sale could be 1) the property is becoming too expensive to maintain, 2) demand for rentals in the neighborhood is starting to decline, or 3) local government is enacting rent control, tax hikes or regulations that will make it more difficult to achieve your profit target in the future. Also consider whether it’s time to trade your property (1031 Exchange) to consolidate equity, reduce management costs, or improve the quality of your rental property portfolio.
If you have questions regarding rental property management or need help with any of the five tips on my list, please drop me a line. Contact Us