1. Increase Occupancy (Smartly)
Each month you have a vacant unit sitting you lose about 8.3% of the potential yearly revenue from that unit, which means that every month it sets vacant it starts to add up quickly. As soon as you find out that you will be having a vacant unit you need to do a market survey to confirm the current market rate on your unit. Have your lead maintenance person that does your final walkthrough prepare the list of repairs/maintenance issues (if any) as they do the walk through so they can order the needed material that day and they can be prepared to start the turn of the unit as soon as it becomes vacant. Once the unit is vacant begin placing your ads so that as soon as the crew has the unit ready for market you can show the unit immediately. Make sure your market survey is current allowing you to set the best price for your available units and know the specials (if any) that are working the best in your area, if you need to fill several units consider running an aggressive special to get your units filled but be sure you don’t give money away that you don’t need to. Always offer your residents a referral for bringing someone. Most importantly listen to the market, if you are not getting interest in the unit, you may need to lower the price.
2. Raise Rents Smartly
Know your market rents, know how your property compares to the market and set your prices accordingly. I find that sometimes it’s wise to offer an incentive when raising rent, carpet cleaning or an accent wall can make the whole increase issue a lot more palatable for your renter. This method can also help if you have seen a minor decrease in rents as if the resident believes they can get a better deal somewhere else they may leave but if you make their home even nicer they may decide to stay put and not come out of pocket for the moving expenses. It’s also good to know about how much those moving costs maybe in case it gets brought up. Make sure that the system you are utilizing sets reminders for rent increases are due, when leases come up for renewal and be aware of maximum rental increases allowed if you are in a rent control area.
3. Be Consistent With Late Fees
Keep in mind that you are running a business, if you don’t collect the fees that are due, you are leaving money on the table. Keep in mind that your residents will talk and if you decide one person can be allowed to not pay on time, or pay the late fee, you will most likely be hit up by more residents asking for the same.
4. Minimize Turnover
Turnovers can be expensive, the cost of turning the unit and advertising the unit can add up very quickly, and as mentioned before, one month of lost rent equates to an 8.3% loss in annual revenue for the unit. If you have a tenant that has run into some financial troubles you may need to work with them for a few months but don’t give too much and always make it work to where you receive all money that is owed. Some options are to add to the following month’s rent, add to the end of the lease, and be sure you are paid in full otherwise the residents may talk and you will get bombarded with requests for assistance.
5. Additional Revenue Streams
As you probably made this investment to make additional money it makes sense that you look at all potential ways to make additional revenue, here are a few ideas.
1) Extra storage
2) Bike storage
3) Charge for an accent wall
4) Laundry rooms
5) Vending machines
6) Upgraded features/appliances in units