You’re bound to make a few mistakes along the way as a rental property investor. And that’s normal. However, there are some faux pas’ that can seriously tank your rental property ROI. And those need to be addressed immediately.
As a rental property management firm and partner to hundreds of investors like you, we see all kinds of missteps. These few tend to have the worst impact on your portfolio. And if you were our client, we’d fix these first.
1. Signing Leases with Your Gut
Maybe the applicants are relatives of people you know. Or maybe you’re just in a hurry to get someone moved into your space. Whatever your reasoning for signing leases with your gut – stop. Tenant pre-screening is an essential step in the profitable leasing process. It’s how you can determine whether or not a candidate can afford to pay rent, is employed, or has a felony. This is not a step you can skip, like ever. It’s a mistake that can cost you thousands of dollars in property damage, attorney fees, and more. And it will tank your rental property ROI.
2. Thinking Your Rental Is a Hobby
Your rental property isn’t going to make you any money if you’re still looking at it as a hobby. Some people inherit properties; others acquire them as a chance investment. But if you approach managing your real estate from the perspective of a side hobby or non-priority passive income stream, you’re missing out on valuable revenue. Instead, approach your rental property as a business. There are costs that you consider to be investments into the portfolio. Each dollar invested should move you closer to yielding a return. Every decision you make, from tenant signing to property maintenance, should be through a lens of business operations.
3. Illegal Is Illegal, No Matter How You Slice It
Unfortunately, in our DIY culture, many investors try their hands at handling all the nuances, negotiations, and management of their own properties. But you have to know that there are just some things you don’t know. And there are critical aspects of your business that require expertise and support. Get the lawyer to review your lease to ensure you’re not asking any illegal questions. Hire the electrician to make sure your outlets are all GFCI-protected and up to housing codes. Otherwise, you could be making a huge mistake, and an illegal one at that, capable of opening you up to even more costs.
4. Putting Off Property Maintenance
Your rental property needs new gutters. But you don’t have the budget for gutters right now, so you put it off another season. Seven seasons later, you realize there are cracks in the foundation because water hasn’t been properly dispensed away from the property for so long. It’s a BIG mistake to neglect the condition and maintenance of your rental property. Stop putting off those contractor visits now, so you don’t have major problems and costly fixes later. And keep up with it to maintain rental property ROI.
5. Set It And Forget It with Your Tenants
Another rental property mistake we often see involves investor-tenant communications. It’s easy to get someone signed and moved in, only to “out of sight, out of mind” and forget about them. Tenants have questions. They experience financial hardships sometimes. And it’s the open communication and ongoing relationships you build with them that ensure the renting experience is still a positive one for both parties. You can’t move them in and walk away. Be available. Check-in with them. Send friendly reminder emails and holiday well wishes. In the end, the property owner, with the quality working relationship, will renew the lease. The set-it-and-forget-it owner will be dealing with a vacancy.
If you’re making some or all of these mistakes, this is your sign to make a change, especially if you want to improve rental property ROI. If you want to start making money with your rental property, these are big fixes you can make now to do so. And remember, PMI JCM Realty Group is here to help with all of your property management questions. Our team can take the reins and handle all of the tasks necessary to ensure a growing portfolio with improved ROI. Contact us!
We Can Help with Rental Property ROI
We have a mission to continuously share the latest trends and innovations about rental property investing along with emerging trends in the real estate market. If you’re open to more effective ways for improving your landlord-tenant experiences, growing your vendor relationships, streamlining portfolio performance, or scaling your ROI, get signed up for our free webinar. You’ll find game-changing, real-life methods for rental investment success. Plus, it’s a great resource with all the advice and actionable tips for today’s rental investors. Experience How to Streamline Your Rental Portfolio for Maximum Growth! Rental property investors, both here in Tampa and elsewhere, will always find something innovative worth applying.
You can always connect with us on social media, as well! Participate in our Facebook Group discussions, which are great for answers to the most pressing rental management investment questions. Join the insightful conversations and collaborate! Reach out to other property owners interested in achieving similar portfolio ROI goals. Exchange suggestions with fellow professionals and talk in-depth about today’s tenant challenges. And should you require a more detailed or tailored solution, hop online and schedule a meeting on my calendar!