Maintain a positive ROI with your investment rental property

admin 0

Occupy your investment property in a timely and profitable manner

To maintain a positive ROI on any investment purchase, you have to have tenants, right?

RIGHT.

However, I often see many investors doing this process the wrong way! I constantly hear of the stress and annoyance of landlords who are unable to rent their property in a timely manner OR profitably. Stress kicks in, buyers remorse is next, and the (joke) drink ensues.

What can we do to ensure that our new investment is occupied at a desirable price with equally desirable tenants?

Become your own rental agent!

As a real estate agent, I’m sure I’ll get burned for saying this, but the MLS is NOT the way to rent your property these days! This requires the additional expense of 10% of your net gross rent. Doesn’t it make sense to first save that amount and second to transfer those savings? If you are going to give that 10% to an agent, give it directly to your tenant! No, I don’t mean give them a wad of cash to sign a lease, just require less deposit for them to move in, isn’t that a motivator to choose your property over your competitors?

Research before you buy!

If this doesn’t sound like the most logical advice I can give… But it’s true and often forgotten. DO NOT and I have to repeat – DO NOT buy an investment rental property without finding out what your lowest rental income will be. Forget greed and how much could you charge, how much can you get? Do your homework and find out, first, what current tenants are paying in comparable units and, second, what comparable units are asking for. Will the lowest amount you can expect make your ROI high? If not, move on.

Don’t get bogged down with credit applications and referrals

Everyone deserves a second chance, right? Just because a prospect has bad credit or can’t provide adequate references doesn’t make them a bad tenant. Yes, the default rate is higher, but I’ve also seen people with 760 credit scores go into foreclosure, we all have now. This may sound nonchalant or reckless, but GO WITH YOUR INTRODUCTION. You must judge your prospective tenants for yourself, what feeling do you get from them? If it feels good, go ahead. There are no guarantees in life, sometimes we have to take our chances with the underdogs, when the odds are stacked against us, however they can pay off handsomely! (do you want to go to the track?)

Keep your tenants happy

Again, it seems obvious, but this too is often forgotten. A happy tenant is a paying tenant as well as a courteous tenant. Do you remember the days of high school parties? If you were friends with the owner of the house, weren’t you looking after the house during the ruckus? However, if you were in a “strangers” house, spilled beer here, dented a wall there, whatever… it’s not my house. Tenants have the same mindset, if they like you and understand that you respect them, they will treat your home like their own and the reward for this is priceless!

For more tips, advice or ideas on how to best occupy a rental property or its capacity, please visit us at:

SFLA Investments

Leave a Reply

Your email address will not be published. Required fields are marked *