Rental properties are profitable… but only if you get property management right.
As a South Florida real estate investor, you need to know what you should and shouldn’t do in order to make more money. Owning real estate can be rewarding, but it can also be a lost opportunity if you go it blind. Like any market, real estate isn’t for the faint-hearted. The field is filled with risks that can ruin your returns, and that can make you regret that you even invested at all.
Lucky for you, the property managers at Luxury Property Care are experts when it comes to managing this money-making asset. In this article, we’ll go over the ways you can make the most out of your South Florida property and make sure that it’s always resulting in great returns.
Tip #1: Partner With a Property Management Company
Not all investors have the time to oversee every little detail. That’s why they partner with a property management company. By delegating your duties to a property manager, you’ll be able to guarantee that your property is taken care of, your tenants are looked after, and more. This will allow you to serve your tenants well, and in turn, prevent tenant turnover.
If your property is in Palm Beach County, Miami-Dade County, or surrounding areas, you can partner with a South Florida property management firm to help you with your day-to-day property needs. In addition, they can provide you with professional advice on your property investments.
Tip #2: Run the Numbers
It can be tempting to spruce up your rental property, but make sure that you can pay for these rental property upgrades. Sit down with your property management agent to set a budget that’s reasonable as well as realistic. Estimate the amount you’ll spend on maintenance, repairs, and more. Then, determine the rental income that you’ll likely make. Put them side-by-side to see if you’ll still turn a profit, or if you’ll end up at a loss.
Ideally, this should be done before you buy the rental property. It’s the best way to ensure that the particular property you’re investing in is profitable from the start.
Tip #3: Raise the Rent
As a real estate investor, you should set a competitive rental rate. If you price your property too low, you won’t be able to make money, but if you’re too ambitious with your rent, you won’t be able to find tenants.
However, you should raise the rent yearly – otherwise, you’ll be “stuck” with low rent, and you won’t be able to pay for certain services, such as contractors, electricians, and the like. Keep in mind that these services will inevitably be more expensive over time, so your rent should be able to keep up, too.
As a rule of thumb, don’t be unreasonable with your rent. Try to understand how it will affect your tenant’s life, too. If they can’t afford the rent increase, it’s up to you to decide whether or not to renew their contract, or to offer them a compromise. If you need information on how to raise your rent without losing your tenants, get in touch with a luxury home management company.
Tip #4: Go the Extra Mile
Your tenants will be more willing to pay a premium if you provide them with certain services that they can’t find elsewhere. For instance, if you own a multi-family such as a condominium, you can offer an in-unit washer so that they no longer need to run downstairs or go to the laundromat. Alternatively, you can provide onsite laundry services (not for free, of course) o you’ll have an additional source of income! Tenants won’t want to give up this convenience, so they’ll gladly pay more.
Again, make sure that you can pay for these property upgrades. If you can’t afford these tangible features, you can offer intangible benefits instead. For example, you can go the extra mile by being there for your tenants 24/7, or by providing them with convenient ways to pay their rent.
Tip #4: Rent to Pet-Owning Tenants
Widen your tenant pool to pet-owning tenants so you can increase your rent. It’s no secret that pet owners struggle to find a rental home that allows pets, particularly dogs. That’s why, when they finally find a property, they’re more than willing to pay more for it.
If you allow pets in your rental property, consider charging a “pet rent” or “pet fee” on top of the regular rent. Keep in mind that renting to pet-owning tenants is risky, which is why you should make sure to collect more. In case the pet causes damage, you can use the pet fee to pay for repairs. By charging pet rent, you can also consider it as additional income – but obviously, you have to follow state laws.
Tip #5: Maintain Your Property
A well-kept property is a money-maker. When you make sure that your property is in tip-top shape, you won’t have to pay for unexpected repairs that can impact your income. Conduct routine inspections to monitor the property’s condition, and tell your tenants to report repairs the moment they notice them. With that said, it would be wise to invest in an app or portal where your tenants can report repairs at any time.
If you’re a long-distance landlord, partner with a property management agent. You can delegate all property management tasks to them so that they can make sure that everything is in good working order. They will nip problems in the bud so that they don’t turn into costly repairs.
Final Thoughts
Whoever said that real estate investing is easy was lying. To make money from real estate, you first have to make sure that your investment will be profitable. You also have to avoid tenant turnover, raise your rent, stay on top of maintenance, and so on. The list of to-dos is endless!
Fortunately, with a property management company like Luxury Property Care, you can make sure that you have time to do all of these (and more). Professional property managers will take care of your real estate investment so that all you have to deal with are the minor details.
For more information on our property management services, call us at (561) 944 – 2992 or complete our contact form today.
