When it comes to reaping maximum gains from your investment property, choosing the right property in the right area---and pricing the rent correctly---are only half the battle. Once you've purchased a rental property with excellent profit potential, you can help ensure you actually realize that profit by taking certain steps used by veteran landlords.
Prospective renters on the hunt for the right apartment look for a number of things in an apartment, including location, neighborhood character, crime rate and attractions nearby. Once they've identified the general area where they'd like to live, amenities are often a key criteria when it comes to evaluating individual properties.
With renting in high demand nationwide---and expected to increase in the next few years---the American Apartment Owners Association advises landlords to take a long look at what they can do to make their units more appealing to renters. Whether it's replacing worn carpet with hardwood flooring, modernizing counter tops and cabinets, adding more storage, or letting tenants choose paint for an "accent wall," upgrades will allow you to keep vacancies low while marketing your property to an affluent demographic.
Once you've renovated your rental, you can expect to have a larger-than-average pool of interested applicants to choose from when it comes to selecting a tenant. Taking care to properly interview and screen each potential renter is the next step in maximizing your property's ROI.
When you add up the cost of rent lost during a vacancy, plus cleaning fees, advertising expenses, and the time it takes to show a rental and select a tenant, you quickly realize that minimizing turnover is key to maintaining your profits. Finding a tenant who you can envision renting to long-term is the best case scenario.
Beyond meeting your basic income and credit score criteria, look for a tenant history of stability, whether in the form of multiple years at the same job or long-term stays at former residences.
Keeping your property in good shape not only inspires renters to want to stay put, it ultimately saves you money in the form of preventing major maintenance disasters. Many landlords choose to use property management companies to handle routine upkeep, which can range from performing regular inspections of major household systems, to replacing furnace filters, to winterizing pipes and outside spigots, to responding to tenants' service requests.