More and more people are looking to rental properties as a way to diversify their investments.
When offering a rental that will benefit both tenants and landlords, a careful analysis of how everything works is required. This can range from finding tenants, maintaining your property, setting the appropriate rental prices, and finding the best insurance for your property investment.
Your aim, whether you’re an experienced property investor or a first-time investor, is to make as much profit as possible from your property.
Here are 4 things to keep in mind when looking to maximise your property rentals return on investment.
1. Focusing on occupancy
For your property to be profitable, you need tenants. To ensure that you get the best ROI for your rental, it only makes sense that you must make sure your property is occupied at all times. Disruptions in occupancy can result in you losing valuable monthly rental, therefore it is beneficial for you to find quality tenants and hold onto them.
Communicate with your current tenants as to what their plans are, so you can see when it is required of you to start marketing your rental to new tenants.
2. Do preventative maintenance
One way of keeping your tenants happy and thus ensuring they stay on or extend their rental agreements is to perform maintenance on your property before issues arise.
Reactive maintenance is more costly and far less convenient. Not taking the time to maintain your property will cost you more time and money in the long run. After all, appliances and major systems will break more frequently when they’re not maintained.
Therefore being proactive and doing maintenance before it is needed will ensure you are maximising your rental ROI.
3. Price the rent appropriately
It is a smart idea to regularly review the amount of rent you charge and determine if it’s in line with the current market. For example, you may have had tenants sign their lease at a time when competition among renters was less fierce and rentals were lower.
However, this may not be the case anymore and high demand for rentals in your area could provide you with an opportunity to revise your rental rates.
To keep in the theme of good communication with your tenants, be sure to give them plenty of notice regarding any changes in rent.
Additionally, there are strict laws regarding the raising of rent. You are not allowed to increase your rental price whenever you feel like it. You may only increase rental prices when the fixed term of a tenancy agreement is up.
There are also rules in place regarding how often you can increase rent, so be sure to research the regulations in your area before making a decision.
4. Finding insurance that works best for your investment
Insurance is a costly necessity when it comes to renting out your property, and overpaying for it can lower your profit margins. Therefore it is important to find the right insurance option for you and your property.
It is beneficial to shop around for quotes before settling on a specific insurance portfolio. We know it can be tempting to choose the first insurance company you speak to, but take your time and get several quotes to compare before making your final choice.
It is wise to re-evaluate your insurance every few years, to ensure that your choice is still working optimally for you. There are always new and improved deals coming out, so it may be in your favour to look into some of these options every once in a while.