Rental Property Tips for Real Estate Investors
Every successful investment property owner knows that the secret to making your asset profitable hinges on your ability to keep your tenants happy. You might offer the most luxurious apartments in town, but if the residents aren’t happy, it’s going to affect your cash flow in several ways:
- Unhappy tenants aren’t likely to stay with you for the long term.
- Renters who believe they’ve been treated unfairly can seek legal recourse, which will in the best-case scenario cost you legal fees. In the worst-case scenario, it could wind up costing you thousands of dollars in damages.
- Dissatisfied residents frequently share their bad experiences online. This can result in irreparable damage to your reputation.
Clearly, it’s imperative to make sure your tenants are satisfied. Keep the following tips in mind:
- Always run background checks on prospective renters and verify their income before offering them a lease. Background checks are simply common sense, since you want to provide a safe environment for all your tenants. In addition, rent should be no more than 30 percent of a household’s income. Renting to people who can’t afford your prices is bound to lead to problems for them; plus it can impact other renters, as well as your cash flow.
- Keep year-over-year rent increases minimal. Disproportionate rent hikes are bound to make tenants unhappy, so do the smart thing and keep increases reasonable.
- Enforce property rules such as health and safety guidelines, as well as pet policies. Your tenants have likely chosen your rental property because it’s a clean, safe, and pleasant place to live, so you need to keep it that way. Take corrective action against tenants who violate the rules.
- Maintain your investment property well. It takes a lot of hard work and money to keep a rental property looking and functioning well, but the investment will keep your tenants happy. It will also maintain or even increase the value of the real estate.
- Respond to issues quickly and effectively. Whether it’s a leaking faucet, a cracked closet door, or a broken washing machine in the laundry room, make sure to resolve issues as soon as they arise.
- Establish an emergency hotline. Emergencies don’t keep office hours. Provide your tenants with an emergency phone number they can call in the event something needs immediate attention, such as a broken pipe in the middle of the night.
- Offer community building tools and events, but keep them optional. Some tenants want to be a part of a community, so it can be useful to have an online community—even if it’s just a Facebook group—and organize fun events like barbecues and holiday parties for the residents’ children.
Finally, one of the most important things you can do is to offer service with a personal touch. Small gestures like greeting tenants by name, asking how they’re doing, and taking the time to chat with them now and then can mean the difference between a good investment property and a great one.