Maximizing Investment Property ROI
When it comes to reaping maximum gains from your investment
property, choosing the right property in the right area---and pricing the rent
correctly---are only half the battle. Once you've purchased a rental property
with excellent profit potential, you can help ensure you actually realize that
profit by taking certain steps used by veteran landlords.
Give Tenants the Amenities They Want
Prospective renters on the hunt for the right apartment look
for a number of things in an apartment, including location, neighborhood
character, crime rate and attractions nearby. Once they've identified the
general area where they'd like to live, amenities are often a key criteria when
it comes to evaluating individual properties.
With renting in high demand nationwide---and expected to
increase in the next few years---the American Apartment Owners Association
advises landlords to take a long look at what they can do to make their units
more appealing to renters. Whether it's replacing worn carpet with hardwood
flooring, modernizing counter tops and cabinets, adding more storage, or
letting tenants choose paint for an "accent wall," upgrades will allow
you to keep vacancies low while marketing your property to an affluent
demographic.
Choose and Retain the Right Tenants
Once you've renovated your rental, you can expect to have a
larger-than-average pool of interested applicants to choose from when it comes
to selecting a tenant. Taking care to properly interview and screen each
potential renter is the next step in maximizing your property's ROI.
When you add up the cost of rent lost during a vacancy, plus
cleaning fees, advertising expenses, and the time it takes to show a rental and
select a tenant, you quickly realize that minimizing turnover is key to
maintaining your profits. Finding a tenant who you can envision renting to
long-term is the best case scenario.
Beyond meeting your basic income and credit score criteria,
look for a tenant history of stability, whether in the form of multiple years
at the same job or long-term stays at former residences.
Be Sure to Keep Up with Maintenance
Keeping your property in good shape not only inspires
renters to want to stay put, it ultimately saves you money in the form of
preventing major maintenance disasters. Many landlords choose to use property
management companies to handle routine upkeep, which can range from performing
regular inspections of major household systems, to replacing furnace filters,
to winterizing pipes and outside spigots, to responding to tenants' service
requests.
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