As a landlord or property manager with multiple real estate investments, the focus is always profit maximization. How can you efficiently reduce expenses and strategically raise rental rates? It’s your ability to answer this question that will likely determine the amount of success you have in your career.
Invest in High ROI Projects
Every house or apartment needs a little TLC occasionally. While the upfront cost may be high, it’s important to look at the ROI you’ll get later on. Not all home improvement projects are created equal and you only want to focus on ones that increase the value of your property.
According to studies, kitchens and bathrooms are the most expensive areas to renovate, yet consistently produce the highest return. The key to approaching kitchen and bathroom renovations is to limit your focus to a few key elements. Commercial appliances, fresh countertops, and stone or wood flooring can make a world of difference. In the bathroom, it’s better to invest in a walk-in shower as opposed to an expensive bathtub, which rarely sees much use.
Sub Out Time-Intensive Home Improvement Tasks
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With the explosion of house flipping and home makeover shows on television, everyone seems to glorify the idea of handling home improvement tasks with a little elbow grease. However, the reality is you don’t need to waste your time with time-intensive tasks when you have bigger things to worry about. Whether it’s replacing window and door screens or resurfacing the hardwood floors, your time is better spent focusing on big-picture goals.
Pay Attention to Curb Appeal
While curb appeal is a major focus when selling a property, it can also help you maximize the value of a rental property. The key is to wow potential renters before they even walk in the door by planting fresh flowers, pressure washing siding, and staging the front stoop or porch with a few stylish pieces. Landscaping is actually one of the most cost-effective projects you can take on.
Encourage Group Showings
As a landlord or property manager, the common school of thought is to schedule showings for potential renters at different times. This way you can give them your full attention and answer questions. However, it can be advantageous to forgo this strategy and instead set up a single showing. As is the case with any product, the perceived increase of demand will allow you to maximize the amount you charge. If you’re lucky, you may even find two prospective tenants in a bidding war.
Reduce Taxable Profits
Hopefully every landlord is taking advantage of the many tax breaks afforded to owners of income producing properties, but it’s worth reiterating. You can claim all repair and maintenance costs on your properties, so there’s no excuse to put off home improvement and renovation projects any longer.
Get the Most Out of Your Investments
Make the most out of your real estate investments this year by reducing expenses and increasing rent when possible. The more you’re able to maximize your profits and facilitate cash flow, the better off your portfolio will be.