Get Regular Appraisals To Ensure You're Setting The Correct Asking Price

In order to succeed in this business, you need to know what your product is worth. Pricing yourself too high will result in a lack of customers willing to part ways with their money. Coverlsy, if you price yourself too low, you will inevitably gain plenty of inquiries but will be leaving money on the table and find it tricky to raise prices after you've figured out why so many people are interested in renting your place all of a sudden. Therefore, regular appraisals are the only way to ensure that you're setting yourself up in the sweet spot between attracting the right sort of persons with the money to spend while not praising yourself so low that every repair you need to make causes you to cringe from the lost revenue that you could have been making.

In order to fully maximize returns with rental appraisals, your first job is finding appraisers who understand the market you're in and have plenty of experience with this task. In many cases, an appraisal will involve an initial consultation with a specialist company, where you will go over various topics, including your property, the current market trends in your area, and ways to attract the sorts of renters that make sense based on their findings. 

Getting help at this stage will ultimately prove to be incredibly valuable. It will give you a massive headstart without any of the usual issues that new landlords usually find themselves facing, such as pricing themselves out of the market or not charging enough and actually losing out compared to other properties on the market.

‍

Understand The Local Rental Market Trends

Understanding local trends can give you a heads-up regarding the sorts of things that people are looking for during their search for the perfect rental. You need to realize that although the tenants will be your customers, they are real people with real needs and desires, and when you're able to meet them, you will set yourself up for massive success.

Just as is the case with any other product in any other industry, if you're not providing what the customer is searching for, you will never be able to get them to part with their hard-earned money. So, what does this really mean in practice, though? In some areas, it could be that they require bigger properties that they can house their families in, while other renters might only need a tiny home that is easy to maintain and won't cost them a fortune in utilities. 

By doing your research, you will get a firm grasp of what people want and give yourself a chance to offer it to them on a platter. Taking your time at this stage and understanding what is a lasting trend rather than a passing one will set you up for future success and ensure that you bring in rental income over a long-term horizon rather than cashing short-term gain.

‍

Research And Select Ideal Neighborhoods

Location, location, location! As the saying goes, it's not necessarily what you've got on offer but where it's located that makes all the difference in terms of what you can charge people. This is why you'll find tiny one-bedroom apartments in places like New York, London, and Sydney, which cost the same as some five-bedroom properties that are located further out in the sticks. However, you also need to remember that if you haven't already invested in your rental property, the locations where you can charge the most will also cost you the most when purchasing them. Therefore, it's wise to take a step back and consider what you want to achieve and what capital you have to invest.

In some instances, you might find that places that are more densely populated and cornering the market in affordable, smaller homes that single people or couples are more likely to want to rent is a better use of your money. In other cases, it could be that the family market in areas a bit further out of the main urban centers but with better access to schools and amenities will serve you best. Whatever it may be, the point is that you need to do your due diligence so that you place your money most appropriately. 

‍

Optimize Property Management For Efficiency

If you are fortunate and business savvy enough to be the proud owner of multiple properties, you will need to start looking at ways to optimize the management of said properties. This will include setting up software solutions that enable you to stay on top of everything involved in the process, such as resignation payment, contact with tenants, tax, maintenance, and a raft of other things that are related to the management of numerous homes. If you are finding yourself becoming overwhelmed, it might be time to partner with a dedicated property management company that will take most of the heavy lifting out of your hands, but for a fee.

Essentially, you will end up weighing up what makes the most sense for you. Do you want to reap all the rewards from being a landlord but also handle all of the work, or are you prepared to part with a percentage and pass off the worst aspects of the rental business to someone else? If you only have a few homes, then you will likely find that setting up your own systems and doing things yourself is perhaps the most lucrative option. 

‍

Invest In Quality Property Upgrades That Make Sense

When many new landlords buy their first properties, they have a tendency to invest vast sums of money in updating the place in the hope that they can charge more. However, you need to remember that you're buying the place in order to rent it out, not for you to live in. Therefore, your best option is to upgrade it only where it makes sense. For example, if the wallpaper is ripped and damaged, then you will obviously need to fix that. However, if you move in and you personally don't like it even though it is still in good nick, you can probably avoid the expense of reaping it.

The caveat here is that if you happen to have a larger property in a highly desirable area, then it might make sense to invest in updating and upgrading it to appeal to higher-end customers.

‍

Screen Tenants Thoroughly For Reliability And To Avoid Serious Issues

If you want to avoid problems with your tenants (hint, you do), then setting up a screening procedure will save you so much stress and anguish that you will be happy to have put in the effort in the first place.

Now, while you can't exactly go around breaching the various data laws in place to protect people from having their ideas sifted through, there are some things you can do to increase the likelihood of landing on the perfect customer:

• Set clear criteria on who you want to live in your house.
• Determine how much they earn, and if they're able to afford the rent you're asking for.
• Ask for a credit score (and if they're unwilling to provide one, this could be a red flag).
• Consider a background check to ensure no criminal history.
• Set an explicit pet policy and stick to it (but understand that many people are obsessed with their pets, so you might be limiting your pool of potential customers if you're too strict).
• Set a smoking policy.
• Conduct an interview to see if you are able to create a rapport. You don't need to be besties, but you will need to get along with each other.

‍

Make Sure That You Treat Your Renters As Real Customers And Not Just Like An ATM

If you are really interested in a long-term, stable rental income, then you must treat your tenants as real people rather than just a means to an end. Where many of these online financial influencers fall flat is that they overlook the importance of the human relationships that are required to ensure everyone is happy. When you realize that this is a business like any other and that your product just happens to be a home rather than an item, you will soon realize that the usual best practices of business apply just the same to your business as they might to any other. 

Managing the return you make on a rental property involves plenty of factors, many of which we've noted here. You will set yourself up in a great position as long as you understand why you're getting into this industry, the actions you should take, and those to avoid.