You may reach your business objectives not only by acquiring numerous properties, but by maximizing your profits on your current real estate portfolio.
Here are a few ways to increase profitability.
In multi-unit spaces, seek opportunities to add services like coin-operated laundry, soap and merchandise vending machines. Coin laundry generates revenue and offsets the cost of water, hydro or gas, and it also increases the property’s return on asset value. Tenants don’t mind paying a few bucks for a wash and spin dry.
Another way to increase cash flow is to offer a cleaning service when they sign up. Tenants are often pleased to pay for services that make life easier. You can set the rates and negotiate with the cleaning company to provide the service, taking a percentage for your time and effort; it’s all managing properties efficiently and profitably.
Another way to increase cash flow is to offer a cleaning service when they sign up. Tenants are often pleased to pay for services that make life easier. You can set the rates and negotiate with the cleaning company to provide the service, taking a percentage for your time and effort; it’s all managing properties efficiently and profitably.
Lower rental fees compared to other neighbourhood properties attract tenants, decrease turnover, and have the added benefit of reducing complaints. Tenants are less likely to bring up minor issues if they feel they’re getting good value. Conversely, tenants who perceive they are paying top dollar tend to complain more often and want better service.
With that in mind, it is also important to increase your rents incrementally, year-over-year. It is a delicate balance that requires knowledge of your property’s value relative to your competition.
Where rent is controlled, it is imperative to deliver the regulated and allowable increase each and every year. This helps cover the seemingly never ending price increases on utilities, taxes and labour for example.
Another strategy is to schedule work, upgrades and renovations to coincide with a lease renewal, or new tenants moving in so that they feel they are getting something extra for their money; perception matters.
It doesn’t hurt to ask occupants if there is anything that would make them happier and more comfortable. Improvements are often necessary as part of your maintenance program, but also increase the market value of the property and deliver an immediate return on investment.
With that in mind, it is also important to increase your rents incrementally, year-over-year. It is a delicate balance that requires knowledge of your property’s value relative to your competition.
Where rent is controlled, it is imperative to deliver the regulated and allowable increase each and every year. This helps cover the seemingly never ending price increases on utilities, taxes and labour for example.
Another strategy is to schedule work, upgrades and renovations to coincide with a lease renewal, or new tenants moving in so that they feel they are getting something extra for their money; perception matters.
It doesn’t hurt to ask occupants if there is anything that would make them happier and more comfortable. Improvements are often necessary as part of your maintenance program, but also increase the market value of the property and deliver an immediate return on investment.
A great way to minimize vacancies and turnover is to either find or extend the tenancy term. However, in the event that your tenant must move, vacancy can also be minimized by reducing turnaround time. The moment a tenant provides notice, advertising and marketing should begin. Always have great pictures, video, and 360 panoramas were ever possible. Castle Inc.’s photographers will take care of all that for you. Our online programmers will have a listing up in 24 hours; and the phone should start to ring.
Other strategies to increase demand and interest include a quick paint job, make any repairs, landscaping, polish the floors and of course a thorough cleaning. When the existing tenant moves out, the new one moves in, sometimes on the same day.
Price is a key consideration. High prices increase turnover and make the space difficult to rent quickly. Everyone wants the highest price but there are important trade-offs to consider. The more attractive the price the faster it will rent and the longer they’ll stay. If your vacancies are consistently high, you may be doing it to yourself and need to think about your price point.
Each month a vacancy costs 8.3 percent of annual income. Therefore, you would be better off to rent the space faster for five percent less per month, or two months faster for 10 percent less, and so on.
Other strategies to increase demand and interest include a quick paint job, make any repairs, landscaping, polish the floors and of course a thorough cleaning. When the existing tenant moves out, the new one moves in, sometimes on the same day.
Price is a key consideration. High prices increase turnover and make the space difficult to rent quickly. Everyone wants the highest price but there are important trade-offs to consider. The more attractive the price the faster it will rent and the longer they’ll stay. If your vacancies are consistently high, you may be doing it to yourself and need to think about your price point.
Each month a vacancy costs 8.3 percent of annual income. Therefore, you would be better off to rent the space faster for five percent less per month, or two months faster for 10 percent less, and so on.
Turnover costs money. There is advertising, maintenance, cleaning and repair costs, such as painting and replacing flooring that your previous tenant would have lived with. Additionally, there are expenses in tenant acquisition, such as advertising, paper work, and time, plus a vacant apartment does not earn generate income.
In some cases, relatively lower rent may increase revenue, although, price isn`t the only factor involved in tenant retention. Another major issue, and often neglected, is customer service. Whether you personally manage your properties or have Castle Inc. manage them for you, treat your tenants with respect and professionalism. We deal with tenant concerns and request immediately and within reason, to their satisfaction. A good tenant/landlord relationship keeps tenants from thinking about moving.
To assess whether Castle Inc., or your property manager is performing in a way that fosters good tenant/landlord relationships, ask them for feedback. Let them know their opinion matters and has value, and invite them to contact you directly if they are dissatisfied in any way. The extra step often results in loyal and long lasting occupants.
In some cases, relatively lower rent may increase revenue, although, price isn`t the only factor involved in tenant retention. Another major issue, and often neglected, is customer service. Whether you personally manage your properties or have Castle Inc. manage them for you, treat your tenants with respect and professionalism. We deal with tenant concerns and request immediately and within reason, to their satisfaction. A good tenant/landlord relationship keeps tenants from thinking about moving.
To assess whether Castle Inc., or your property manager is performing in a way that fosters good tenant/landlord relationships, ask them for feedback. Let them know their opinion matters and has value, and invite them to contact you directly if they are dissatisfied in any way. The extra step often results in loyal and long lasting occupants.
Being kind to tenants should not transfer over to collecting rent on time. The vast majority of tenants pay on time, and there are occasionally extenuating circumstances, however, collecting rent and late fees on time is essential.
At Castle Inc. we set up the expectations in advance, where everyone knows where they stand in regard to rent payments, after all it’s a business.
If there are lease or rental agreements, bounced cheques, or simply no payment at all, there are laws and regulations that must be evoked to remedy these types of issues, including eviction proceedings where necessary.
It is important to set the tone early, and never waver about due dates, late payment fees, and final notices.
At Castle Inc. we set up the expectations in advance, where everyone knows where they stand in regard to rent payments, after all it’s a business.
If there are lease or rental agreements, bounced cheques, or simply no payment at all, there are laws and regulations that must be evoked to remedy these types of issues, including eviction proceedings where necessary.
It is important to set the tone early, and never waver about due dates, late payment fees, and final notices.
• Before showing your rental property to applicants, have it professionally cleaned.
• Invite prospective tenants to show up on the same day, at the same time. Don’t stagger the showings.
• Potential tenants make up their minds fast. Pay attention to details, because first impressions matter.
• Appliances should look brand new.
• Most rental properties have linoleum, or wood flooring. Make sure to sand, coat or replace flooring if required.
• Have applications and pens on site.
• Dress the part of a landlord, take your role seriously. Take the baseball cap off for example.
• Spend money on improvements that add to the property value or things that will increase rental income. .
• Spend money to have your rental property ad promoted for a week on online listing websites.
• If you think your income property should rent for $1,000 per month, list it for $1,100 a week earlier than you normally would to test the market.
You can always drop the price later.
• Invite prospective tenants to show up on the same day, at the same time. Don’t stagger the showings.
• Potential tenants make up their minds fast. Pay attention to details, because first impressions matter.
• Appliances should look brand new.
• Most rental properties have linoleum, or wood flooring. Make sure to sand, coat or replace flooring if required.
• Have applications and pens on site.
• Dress the part of a landlord, take your role seriously. Take the baseball cap off for example.
• Spend money on improvements that add to the property value or things that will increase rental income. .
• Spend money to have your rental property ad promoted for a week on online listing websites.
• If you think your income property should rent for $1,000 per month, list it for $1,100 a week earlier than you normally would to test the market.
You can always drop the price later.
