Simple tips can make a big difference in your investment property revenue and ultimate return.
For multiunit property investors, maximizing revenue and returns lies in small optimizations. While various methods exist to enhance the value of rental properties, some may incur significant costs. Here, we’ve distilled the top five strategies to elevate your property’s income to make it a powerhouse in your portfolio.
Easy Ways to Optimizing Your Rental Property
- Setting the Right Rent
Get the rents right…right from the start. Owners, especially those who have owned the property for a longer term, have lagged on marking their rents to the market. But their loss doesn’t need to be yours. Research the area and craft a plan to get lagging rents up to the current market value. A well-crafted plan that is openly and proactively communicated to tenants can go a long way towards mitigating the exodus that new buyers fear.
Pro Tip: Be wary of current tenants that may have “friends and family” rates. Not only are they paying below market rates, they’re likely not the tenants you want long-term.
- Paying Attention to Utilities
Utilities are often an untapped source of unrealized profits. Individual meters or bill-backs are common ways to shift the responsibility for utility costs from the property owner to tenants. These approaches allow owners to recover actual utility expenses, promote tenant accountability for individual consumption, and positively impact the property’s net operating income (NOI). Note that local regulations may negate these options.
- Pet Rent > Pet Deposits
Substantial pet deposits can be off-putting or sometimes out of budget for potential pet parents. Instead, trade it for pet rent. With pet rent, fur babies turn into rent-paying roommates. It also takes the initial bite out of the deposit for renters, who can then spread the costs over time. Meanwhile, you could be netting more than a pet deposit within the first year while also covering pet-related damage repair costs.
Pro Tip: Market your property as pet-friendly for increased renter demand.
- Right Renovations
Achieving market rents for a multiunit investment property doesn’t always necessitate large-scale renovations. Assessing the property’s current condition, local market dynamics, tenant preferences, and budget constraints is crucial. If the property is well-maintained, modest updates and cosmetic improvements might suffice to attract tenants and command competitive rents. Analyzing comparable properties in the area and consulting with professionals can provide insights into strategic, cost-effective upgrades. Incremental improvements over time, targeted upgrades in key areas, and effective marketing strategies can enhance the property’s appeal without the need for extensive renovations.
Pro Tip: Two spots worth spending on are the kitchen and the bathrooms. Get new light fixtures, upgrade the countertops and cabinets, and a fresh coat of paint to better your chances.
- Income, expenses, and management optimization
Don’t leave a stone unturned. Maximize your returns by optimizing property income and expenses. Implementing automated systems for late fees and add charges for credit card processing fees. Look at revenue-sharing options for amenities, like paid laundry machines. Regularly monitor and appeal property taxes to make sure you’re paying as little as possible. Do annual reviews of vendor contracts, such as disposal services. Additionally, quoting building insurance annually helps secure the best rates.
Ready to decode these rental mysteries and turn your property into a masterpiece? Partner with a Citypoint broker and leverage their expertise to make the most out of your investment.
Visit our calculator page to see how certain expenses can affect property performance.
