You’d be hard-pressed to find a landlord who doesn’t strive for success. After all, given what a large investment the typical rental property represents, it’s only natural that landlords would aim for the highest possible ROI. However, a fair number of fledgling landlords step into this role without fully understanding what constitutes a successful rental property owner. First-time landlords looking to pave the way for long-term profitability can benefit from the following measures.
Look for Properties in Popular Areas
When seeking out your first rental property, try to limit your options to properties found in areas with robust demand for housing. The more demand an area has, the more valuable rental property is likely to be. So, before committing to buy, take some time to research an area’s population size, rate of growth, median income, home prices and rental rates. This will help you form a clear picture of how desirable the area truly is.
Additionally, a rental property in a high-demand area is likely to appreciate in value, so should you ever decide to sell, there’s a good chance you’ll make a considerable profit. This can be particularly beneficial to landlords who know when to sell real estate investments.
Work with a Good Screening Service
Without tenants who can be relied upon to stay current with rent, you’re liable to have trouble generating returns with your rental property. Regardless of how desirable the property or its location are, tenants who are unable to pay rent stand to compromise its profitability. As such, every landlord should commit to screening prospective renters who submit applications.
In essence, this entails having a look at applicants’ credit scores, obtaining proof of income, looking into criminal backgrounds, and contacting references. Since a lot of steps are involved in the screening process, it’s easy to see why so many landlords opt to cut corners or forgo the process entirely. However, no matter how favorable a first impression someone makes, it is imperative that they undergo a screening process before being given the go-ahead to move in.
If you have neither the bandwidth nor inclination to carry out the screening process on your own, consider working with a highly-rated screening service. As the name implies, such services specialize in performing screening processes for landlords and employers. While this will entail spending a little money, it stands to save you a sizable amount of time and hassle. Alternatively, if you employ any property managers, delegating screening duties to them can be another effective way to relieve yourself of this burden.
Make Sure Tenants Never Feel Ignored
Ignoring the needs of your tenants is never a smart move. At the very least, it’s liable to lead to contentious relationships – which can result in low renter retention rates. Secondly, depending on the types of requests being ignored, you may very well be opening yourself up to legal jeopardy. So, in the interest of maintaining friendly relationships with your renters and increasing renter retention, make sure that your tenants never feel ignored.
Among other things, this entails promptly responding to all texts, emails, phone calls and other communiques from tenants in a timely and professional manner. For example, if a message is received during normal business hours, you should make a point of answering it before the end of the workday. Allowing messages from tenants to go unanswered for long periods is practically guaranteed to make your renters feel unimportant and undervalued.
Furthermore, make sure that every tenant knows how to get in touch with you by providing with them a phone number and email address at which you can be reached during normal business hours. Tenants should also be provided with a number to call in response to emergencies that occur during weekends or after-hours.
Final Note
Investing in something as expensive as a rental property generally comes with the expectation of robust returns. However, as any longtime landlord can attest, success should be taken as a given. First-time rental property owners looking to maximize profitability will need to do their homework and put in a consistent amount of effort. Fortunately, setting the stage for lasting success should be well within the abilities of any landlord who isn’t afraid of a little hard work – especially if they’re equipped with the pointers outlined above.
