Be A Leading Landlord: 4 Ways To Make Your Rentals More Profitable
Being a landlord can be a great job – or it can be a slog. It all depends whether you can make the system work for you by driving passive income, or if you try to do everything yourself.
If you’re ready to take your investments to the next level, these 4 strategies can make your properties more profitable without forcing you to constantly hustle. Though the rental market is facing difficult times right now, savvy management can keep you in the green.
Anyone who has ever gone apartment hunting knows that trying to find the perfect place to call home can be a challenge. Potential renters ping between a half dozen different websites, search community listings, and send an endless stream of emails – but landlords can profit off of this chaos.
As demonstrated by Zillow’s recent commitment to advertising, there are a lot of ways to spotlight your properties to draw in tenants. If you can keep your rentals at the top of mind for interested tenants and make your properties easy to find, you can gain an occupancy edge.
Bring In The Pros
As the saying goes, sometimes you need to spend money to make money, and that phrase is especially true in the real estate industry. This philosophy underpins the entire house flipping market, but it’s also critical to the day-to-day world of property management. So, what should you be budgeting for in order to drive profits? The most important thing to commit to is hiring a property manager.
Even if you only own a handful of rental properties, working with a property management company can make your properties more desirable to tenants, simplify your job by putting daily administrative tasks in the hands of professionals, and ensure your tenants always have the support they need. Property managers can also minimize vacancies by advertising your property and screening tenants, maximizing profits even as you pay for their services.
Shift Property Models
Many landlords are focused on longer term rentals because they require less daily management and provide greater stability, but the fact is that long term rentals are less profitable than well-managed short term ones. Generally, short term rentals occupied for less than half the month, depending on size and market, will be as profitable as long term rentals.
Of course, this may not work well if you’re in an area with minimal tourism, but platforms like AirBnB and VRBO have made it possible to facilitate short term rentals almost anywhere.
Stick To Familiar Markets
One of the hardest things you can do as a real estate investor is jump into a market you don’t know well because prices are good or you’ve heard that the area is growing. Such strategies are okay if you have a sufficient safety net and markets are growing across the board, but any time the market hits a bump – like the current pandemic – it’s best to stick with familiar markets.
While a property manager that knows the area can help make up the gap, your own knowledge of the area will help you make good decisions about what properties to invest in.
Know The Difference
Whatever strategies you choose to boost profits to your rental properties, it’s important to always recognize the difference between being a landlord and being a property manager. While you can be both – and many people are – the most successful real estate investors restrict themselves to ownership and let the professionals handle the day-to-day operations.
When you can distinguish between these roles and you’re clear about what tasks are within your domain, you’ll be much more successful in your endeavors.