The simple strategy for putting more money in your pocket is to stop focusing on monthly cash flow and to do everything you can to avoid vacancies and turnovers. This will put more profits into the pocket of any rental property owner. I get calls from prospective clients who are often unhappy because they are not making enough money. When we talk, they tell me they have great cash flow but tenants move out and high turnover costs or vacancy eat up previous profits. This is a common problem and four simple steps can help you solve it.
Make sure you have a property that people want to live in. Use quality materials when you’re making improvements and upgrades. The days of white ceilings and white walls and white trim with cheap, ugly brown carpet are gone. Cable television and design programs have set higher expectations among tenants.
Use your marketing to find tenants who want to stay in your property for long periods of time, not tenants who are just looking for a one-year lease or an even shorter period. We never know whether they will actually stay, but there are things you can do to limit the number of people who are not going to stay in your property for several years.
Keep Good Tenants Happy
Make your tenant happy. This is your customer. When you go buy something at the store, you don’t go back when you have an unhappy experience. Tenants react the same way. This doesn’t mean you have to do whatever the tenant wants, but if the shower breaks and it takes three weeks to get a plumber out, your tenant will not be happy or willing to stay much longer.
Long Term Decisions
Every time you have to make a decision, think about how it will affect your long term profitability. Too often, decisions are made because you need to get a tenant in quickly, and you will take anyone with a pulse. Or, you’ll want to fix something quickly and cheaply so you’ll use inferior materials to fix things. These decisions can cost you more money in the long term.
For more information about how to put more money into your pocket, please contact us at Harvey Property Management in Indianapolis, IN.