There are only two ways to increase your portfolio’s performance: spend less or make more. Below are some helpful tips that can help improve the profitability of your investment rental properties.
- Know your financing options. Obtaining a fixed, low interest rate loan can secure your rental property investment for a long time. Access to equity can help cover the cost of proper maintenance and possibly allow you to acquire additional real estate investments.
- Property Insurance. Consolidating your individual home policies into one master policy can create tremendous savings while maintaining good coverage levels. Contact your insurance agent and ask about options for your rental portfolio.
- Property Tax. The tax rate on your property is disputable in most states. There are resources available to help you file a request for re-assessment. Although you won’t win every battle, if you can lower the tax rate on a portion of the portfolio, you will add to your net profitability.
- Maintenance. Improving your rental properties between tenants can seem expensive and will increase short term costs, but can also prevent much larger maintenance issues down the road that can topple your bottom line.
- Install energy-efficient lighting and appliances. Although your tenant might pay the utilities, the cost savings can be a huge selling point for future tenants and potentially increase the rental rate for your units. Energy efficient products often have longer life spans, which can also help you decrease your future capital and maintenance costs.
- Be proactive. Instead of reacting to problems on your rental property, take measures to prevent them in the first place. If you know the central air/heating system is 25 years old, start budgeting for a near term replacement to save yourself time and money.
- Take initiative on the outdoor maintenance of your property. Regular exterior maintenance can improve the look of your property, which has a direct correlation to higher quality tenants and higher rental rates. Assuming you live close to your rentals, you can do much of the exterior maintenance yourself which can also create tremendous bottom line savings.