If you are a landlord already, or planning to invest in real estate such as these Nashville rentals, then you are likely looking to ensure you get the best ROI possible. While many factors affect ROI, such as location, property type, and tenant quality, there are several strategies that landlords can implement to improve their rental property’s ROI.
These strategies are generally easy to implement and can help you grow your rental empire if that is your ultimate goal. You can be a good landlord and still make money when you have the right plan and can stick to it. In this article, we will go over some of the best ways to get a good ROI on your rental property.
1 - Reduce vacancy rates
One of the biggest challenges landlords face is keeping their properties occupied with reliable and trustworthy tenants. When a unit is vacant, the landlord isn't generating any rental income, which can strain their cash flow and hurt their overall ROI. Fortunately, there are several strategies landlords can use to reduce vacancy rates and keep their units occupied.
Maintaining the property is the best way to ensure good tenants stay. If you aren’t quick to fix things, they will often look for another rental after the lease ends. This costs you money since you have to pay to prepare the property for new tenants and also pay to find them.
Offering incentives to stay will also go a long way toward keeping tenants. You could offer free parking if you are in an urban area with limited parking available. Or, give a free month of rent if they resign the lease early.
2 - Reduce expenses
Operating expenses, such as maintenance and repairs, utilities, and property management fees, can eat into a landlord's rental income and lower their overall ROI. However, there are several ways landlords can lower their operating expenses and increase their profits.
Performing regular maintenance will help you reduce future expenses by making sure problems are fixed while still small. The longer things are left, the more it costs to maintain or fix them later on.
Landlords can also lower operating expenses by outsourcing certain property management tasks, such as leasing, marketing, and maintenance, to third-party companies. These companies can provide specialized expertise and services at a lower cost than hiring full-time employees.
3 - Reduce property taxes
Paying taxes on your property is unavoidable, yet they can really cut into your profits. Landlords may be eligible for property tax exemptions or deductions, such as homestead exemptions, senior citizen exemptions, or exemptions for certain types of properties. You should research your local tax laws and see if they qualify for exemptions or deductions.
If you believe your property has been overvalued or overassessed, you may be able to appeal the assessment and lower your property taxes. It can be costly and time consuming to go through the process, so make sure you have a good case before starting.