Boost the ROI From Rental Properties With These 7 Tricks
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Investing time and effort into rental properties should result in dependable revenue. Sometimes, real estate investors don’t experience that outcome. These are a few ways to boost the return on investment from any rental property to ensure a passive income stream. A diverse, profitable portfolio is within reach for anyone using up-to-date strategies.
1. Start With a Marketing Strategy
People won’t rent an apartment, house, condo, or any other property type if they don’t know it exists. Marketing is a foundational part of making rentals profitable. Although expert marketing and property management teams are ready to help, investors can create a few strategies independently.
Someone with a rental home should consider advertising their property on major social media platforms in addition to rental websites. Facebook currently has 2.9 million active users, but are they in the target rental demographic for the property?
Pinpoint the profile of potential renters and find which social media platforms they use most often. Posting regularly with active hashtags will get any property in front of more people.
2. Pick a Location Carefully
An investor’s target market will also lead to more informed investment decisions. Someone appealing to short-term tourists in a big city won’t have as much success if they build a rental property far from tourist attractions.
Future renters may also be more interested in properties with unconventional beginnings. Instead of staying at a standard hotel, they might prefer to book a suite in a renovated office building. Using existing resources makes the property more sustainable, which appeals to people living eco-friendly lifestyles. Construction contributes 11% to global carbon emissions, and adaptive reuse can cut that percentage by nearly 80%.
3. Improve the Listing Details
Once someone knows their property’s appeal and what their target demographic wants in a rental, it’s easier to improve the listing. Edit the description to include the most desired amenities, like describing the property’s full kitchen so future families know they can make meals during their vacation.
People also want to know what’s close to their rental property. Mentioning nearby activities and stores allows future renters to picture their living experience. They might prefer a property closer to schools and grocery stores or one that’s downtown near the area’s nightlife.
High-quality pictures are essential as well. They should be part of every listing and social media post. People can read the rental’s amenities but not feel inclined to follow through to the listing’s primary website because they can’t picture the space. Investing in a professional photographer could ultimately boost the overall ROI.
4. Screen Potential Tenants
Property owners often require long- or short-term tenants to undergo screening to protect a rental’s value. Application fees can cover the entire cost of each background check. Knowing who’s staying there is crucial. If they’re likely to conduct illegal activity, perpetrate violence, or otherwise continue a history of property destruction, people might view the unit as unsafe.
5. Create Competitive Rental Prices
A property’s final rental price includes everything guests or tenants could need while they’re there. It keeps the unit looking nice, funds the welcome package they might find on their counter, and pays the property taxes that keep their living space available.
However, future tenants aren’t necessarily thinking about those details. They’re comparing available rates in the same area. Competitive pricing is one of the best ways to boost the ROI of a rental property. Putting the potential tenant’s budget first makes the unit or house more attractive. Consider these factors to set the best price:
- The property taxes
- The monthly mortgage payment
- Rent offered by nearby comparable properties
- Included amenities
- Recent upgrades
Rent prices increase yearly at varying rates to cover these costs and remain competitive. It’s worth adjusting them annually to stay ahead. Even if the property is passive revenue, revisiting rent estimates compared to monthly expenses will ensure a continual ROI.
6. Boost Curb Appeal
People won’t want to stay in a rental property lacking curb appeal. Crumbling driveways, broken floodlights, and overgrown lawns don’t create a homey environment. Neglected landscaping, like tree branches dangling over buildings, can also pose a threat. A windy thunderstorm could knock them free and make holes in the roof.
Investing in the property’s curb appeal boosts the overall ROI in a few ways. More future tenants will consider staying there because they’ll get to live in a beautiful location.
Landscaping is a crucial part of this rental property strategy. Pristine lawns and blooming flowers make any living space the pride of its tenants. It’s also more affordable than some investors imagine. The average family pays $500 yearly for professional landscaping services. The final cost may be even less for smaller rental properties.
7. Hire Efficient Maintenance Team Members
Property owners aren’t the people bringing a drain snake to their tenants when the shower gets clogged. Renters contact a maintenance team, which makes a significant difference in their overall experience.
Highly trained maintenance experts with customer service experience make tenants feel cared for and happy. Poor interactions or slow service may result in unhappy reviews that turn future applicants away. Demonstrate the highest care by ensuring the team provides top-tier service, starting with hiring experienced workers.
Boost Rental Properties ROI
Anyone can use these strategies to boost the ROI from their rental properties. Demonstrating care for tenants, improving the listing quality, and investing in landscaping are just a few ways to guarantee consistent revenue. When listings impress applicants and renters feel appreciated, properties see long-term success that outsells the initial investment.
For more insightful articles and actionable tips about finance and business, check out Capital for Business’ The Working Capital and Financing Blog.
Did You Enjoy Reading This Article? Here’s More to Read: How to Get into the International Property Market
Evelyn Long is a writer and editor focused on home building and construction. She is the co-
founder of Renovated, a web magazine for the home industry.
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