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In Georgia and throughout the country, investors are finding themselves in a mature rental market, where there’s either a housing crisis or communities are on the brink of a housing crisis. Homes are not as affordable as they once were, and tenants are struggling to keep up with rental payments. You may have found it’s slightly more difficult to qualify a large pool of potential renters because their incomes are not quite at the levels that meet the rental demand.
We’re seeing a lot more tenants are sharing houses or renting out rooms in occupied homes. This may leave you wondering how to maximize your return on investment. In this type of market, you need to be prepared and creative.
Be Selective with Tenants
Good tenants will increase your return on investment, and if you are selective in choosing renters who are interested in staying for the long term, you won’t have to worry about expensive vacancies and additional turnover costs. A rigorous screening process is important to find responsible tenants with a history of paying rent on time and taking care of rental homes. Dig a little deeper and find out what a prospective tenant’s long term plan is. If they want to buy a house in a year, you’re going to face a vacancy at that point. If they love the area and they expect to settle into a home for three to five years, you’ll experience better ROI. Provide a Well-Maintained Home
Maintenance helps your return on investment, especially in a mature market. You may be tempted to let those small repairs slide – don’t. It’s always less expensive to fix a small problem than it is to let it linger and become a large catastrophe. Immediate maintenance responses will protect the condition and value of your real estate investment, allowing you to earn more in the long term.
A well-maintained home will also attract better tenants and earn higher rents. These are valuable qualities in any market, especially a mature rental market.
Treat Your Rental Property like a Business
New investors can get emotionally involved in their rental properties, and that leads to bad decisions. It’s important to treat your investment home like a business, because that’s what it is. Don’t develop relationships with your tenants that are friendly rather than professional. Don’t spend a lot of money making updates and upgrades that reflect your personal tastes. Renovating a kitchen with stainless appliances and granite counters and ceramic tile floors might make you feel good in your own home, but your tenants don’t need it, and you will never recoup the money you spend on such a project. Make smart decisions and work with a professional Decatur property manager to provide expert insight and a buffer between you and your tenants.
Allow Pets in Your Rental Property
Some landlords have a hard time with pets, but they can dramatically increase your rental income. When you allow pets, you open up your tenant pool and you have fewer vacancy days to worry about. You can also charge more. People are willing to pay a $300 pet fee and a $25 or even $50 monthly pet rent. This increases your ROI with very little effort. If you’re worried about pet damage, a clear pet policy can protect you.
These are just some of the ways to protect and maximize your ROI during a rental market that offers challenges. For more information on this topic or anything else related to Decatur property management, please contact us at 360 Real Estate Network.