Tips for getting the most from your rental property—including where to put your money to get the most bang for your buck
The math is easy: To boost income from your rental property, you should simply increase what you charge tenants each month. However, dig a little deeper and you’ll learn that raising your rental price can be a delicate matter; one which should be approached with insight and care to avoid alienating existing tenants or scaring off potential renters. To find the rent “sweet spot,” you need to be strategic about increasing it while remaining competitive.
According to Lindsey Schober at Zillow, the general rule of thumb when it comes to increasing rent is as follows: “You should increase rent every year, even just a few percentage points, if permitted by applicable laws and the terms of your lease agreement. This way your tenants are prepared as each renewal comes around and less likely to move out due to sticker shock, while you are better able to plan for the year ahead.”
In addition to taking this straightforward, no-surprises approach, there are several other do’s and don’ts to keep in mind when considering exactly how much to raise the rent.
Dos and Don’ts to Increase Your Rental Rent
Do your homework.
Get a handle on your property’s value in comparison to the local competition. One good way to do this is by keeping your eye on real estate websites such as Zillow, Trulia and MLS. Knowing what other properties are available for rent and how much they are charging will give you a sense of whether there’s wiggle room to bump up your rent. But don’t go overboard—your property should never be the outlier.
Do keep your property in tip-top shape.
A fresh coat of paint and new bathroom fixtures are relatively inexpensive and can go a long way in curbside appeal. Also, making property improvements can pay big dividends in additional rent, as long as you focus on the right ones. According to Stephen Michael White on Rentprep.com, “Rental property improvements need to achieve a balance between investing enough to boost the value of the property and attract top tenants, and spending too much money on all the wrong things without seeing a return on the investment.” Some tried-and-true rental property improvements include new appliances, quality countertops, upgraded windows and extra storage space.
Don’t underestimate the value of services.
These nice-to-have amenities, such as updated laundry facilities, attractive landscaping, and a security system, can help add value to your property and enable you to charge more in rent.
Do prioritize customer satisfaction.
Keep your existing tenants as happy as possible with attention to detail, fast service, and good communication. Not only will you have lower turnover—which translates into a steady flow of rental income—you’ll also earn positive kudos should new renters request recommendations.
Kelly Barton, Asset Manager for HomeUnion®, works as a liaison between investors and renters. Ms. Barton’s biggest focus is on ensuring a smoothly running property. She states, “In addition to taking care of the mundane, day-to-day tasks such as rent collection and maintenance, my goal is to treat all tenants with respect and professionalism. I make sure that their concerns are heard, and handled in a timely matter. The bottom line is that a positive tenant/landlord relationship keeps tenants from thinking about moving.”
Don’t hesitate to ask tenants what is important to them in a rental property—and then deliver (within reason!).
Is there something that would increase their sense of well-being? Perhaps an updated security system would help you justify a rental increase. Are lower energy bills on the list? Perhaps it’s time for new windows.
Do call HomeUnion®.
Operating a successful rental property means there are a lot of balls in the air. HomeUnion® helps juggle all facets of renting a property, from start to finish. We’ll help you find a rental property, acquire it, and then determine the best rental price for more profit. We’ll assist you with powerful marketing to help you find high-quality renters—and then conduct thorough tenant screening. We will help you spruce up your rental property so that it puts its best foot forward. And, once your tenants move in, you can rely on us to take care of property repairs and maintenance…and even collect the rent.
Interested in learning more about how we can help? Schedule a consultation with HomeUnion®.