3 Ways to Increase the Revenue from Your Apartment Buildings
If you are the owner of an apartment complex or rental property, it is important to maximize the profits on your existing investments before hurrying out to purchase new ones. Rather than simply acquiring as many properties as you can, why not take a step back and contemplate whether or not the best way to increase revenue is to focus on your present portfolio. In general, you may find that you can achieve your business goals not only through acquiring a greater number of properties but by operating a lesser number of properties in a more strategic fashion.
The best way to diminish vacancies is to find those long-term tenants so that you do not have to deal with turnover. In a situation where your tenant must move, the vacancy can also be reduced by keeping turnaround time as short as possible. Although tenants are going to move on, it is important to keep occupancy at essentially 100 percent by posting ads the minute you learn of the move. If demand in your area is high enough, there should be immediate interest, and you can line up a fresh tenant to move in directly after the old one. The thing is, nearly every property in almost any neighbourhood has solid demand at a particular price. If your vacancies are constantly high, you may need to reassess your price point. If a property doesn’t have some specific characteristic that sets it apart from all of the others and sells itself, you can give it one by offering the best value in town.
Increase Rent Strategically
Now we can briefly touch on increasing your rents on your long-term tenants. This is a delicate balance that necessitates knowledge of your property’s value about your competition. As mentioned above, tenants may be more loyal if they are unable to find lower rent elsewhere. But this doesn’t mean that you should never raise rents when you have a proper reason to do so. Moving costs your tenants money as well. If the value of their present rental is notably better than the value of a new rental with the cost of moving, you may still have the upper hand.
Turnover costs investors money in many ways. There are advertising expenses, the cost of reinforcing and painting walls, or swapping out flooring that your last tenant would have lived with. Those are in addition to general vacancies. This is another area where comparatively lower rent may have the propensity to increase revenue. One of your main goals should be to locate quality tenants that take proper care of your property and pay regularly. When you find these types of people, do what you can to keep them for the long term. Some people will leave no matter what, because they are moving across the city or province, or buying a house. But the last thing that you need is to lose your top tenants to the building down the street. To determine whether your property manager is performing in a way that nurtures good tenant/landlord relationships, send them a card requesting feedback from your tenants. Let them know their opinion is valued and that they can contact you directly if they are unhappy with their manager.