Are you a property investor trying to find ways to increase your profitability? If so, there are several ways to achieve your goal. There are two main paths you can take. You can either continue acquiring more properties or you can find ways to increase your profits from your existing investments. Of course, you can also do both.
With these options in mind, here are some specific ways to increase your profits.
- Hire a professional property management company
Outsourcing your landlord tasks is the first thing you should consider in terms of increasing profitability. For instance, when property investors in San Antonio, Texas, hire Green Residential, the company has a team of property managers managing their tenants’ needs, repairs, maintenance jobs, rent collection, screening, and even marketing.
The more time you spend managing your day-to-day operations, the less time you have to pursue other investment opportunities. For instance, if your schedule is full of required maintenance calls you need to set up for tenants, show several vacancies, and sift through applications, that’s several hours (and energy) you won’t get back.
Hire a property manager and take back your time. Your time and energy are valuable, and you’ll never reach high levels of profitability when you’re tending to all the daily requirements of being a landlord.
- Raise the rent
There’s no way to say this any other way – raise your rent. If you’ve been giving your tenants a good deal for a long time, consider that you don’t have to keep being the nice landlord who gives everyone a break. Sure it’s nice to do people favors once in a while, but your rental properties are your business. They are your source of income and you need to protect your profits.
If you haven’t raised the rent in years, consider that other landlords in the area already have raised their rents. If you’re worried about losing a tenant over a rent raise, don’t worry so much. You have every right to raise the rent to match the current market, and if your tenants don’t like it, they can move.
Make the tough business decisions that will support your income. Don’t let your tenants continue to get a good deal at your expense. Most tenants will be able to afford a rent raise; they just won’t like the idea and they may complain. However, there will always be someone else willing to pay the rent. If your current tenant leaves, you’ll fill the vacancy.
- Raise your standards
Are you stuck with tenants who don’t pay rent on time or at all? If you’re used to getting tenants who start off great and fall into the weeds, it’s time to raise your standards.
As a general rule, it’s wise to only accept tenants with a credit score of 650 or above. This will ensure you only get tenants who are clearly reliable enough to pay their bills on time. Although, like anything, there are no guarantees. People can have a good credit score one day and stop paying their bills the next. However, it’s one of the best ways to discern good tenants.
Another standard to adopt is no evictions. Simply don’t accept any tenants with evictions on record. If it was in the distant past, it shouldn’t be on their credit report. However, always be cautious of anyone who is too eager to move into your vacant unit. They might be involved in a pending eviction lawsuit, so try checking the court system online to see if their name comes up for a scheduled hearing.
- Evict fast
You can’t make money when your unit is occupied and the tenant isn’t paying rent. If you need to evict someone, do it fast and don’t wait. If they end up paying rent and you want to keep them as a tenant, you can always back out of the process. However, the longer you wait to start the eviction process, the more days you’ll be without rent.
In the end, if you wait to evict a tenant, they can do some serious damage to your property. The longer people have to be destructive, the more money it can cost you in repairs.
Treat your properties like a real business
Whether you own one rental property or ten, treat your rental properties like a real business. Don’t let your tenants run the show, follow the law to the letter, and be willing to invest your time and money in services to help you manage your tasks. This is the foundation of creating profitable investments.
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