When you manage properties, costs can quickly escalate. Tenant turnover, excessive maintenance and repairs, and high water and electricity bills can all prevent you from making a profit. You will obviously have certain costs if you want to serve tenants properly, but there are various ways to reduce your expenses so you can make more profit.
Screen tenants carefully
Finding and leasing to high-quality tenants is essential. They make your business run more efficiently, reduce your administration costs and the time you spend overall on dealing with problems. You ideally want tenants with a history of paying their rent on time and who are responsible and conscientious. To find tenants like this, you need to collect the right information from them so you can screen them effectively.
- Check for consistent work history and financial stability.
- Look for a favorable rent history (testimonials from previous landlords).
- Verify income and creditworthiness.
- Look out for deceitfulness and errors or omissions.
- Conduct a criminal background check.
Evernest, Livingtown, APM and Mynd have qualified property managers in Atlanta who manage all the day-to-day tasks of property management for you. This includes finding tenants and conducting thorough screening to make sure they are suitable.
Be proactive about maintenance
Cutting repair fees and excessive maintenance expenses is essential if you want to be profitable. Any cost-cutting must be done with an eye on what provides good value. If you fail to maintain your rental property, you will pay the price later. One of the most costly repairs is on a roof, and the reason is usually that the roof wasn’t properly cared for and cleaned. If you let your property go, this will make tenants feel that you don’t care about your property which sets a bad example for them.
Using property management services can help you to keep your rental property in the best possible condition, which means it retains its value. These services use their own teams for maintenance, which means the price is more affordable. They conduct regular maintenance inspections and offer a maintenance guarantee.
Reduce tenant turnover
It is much more cost-effective to retain existing tenants than to try and find new ones. Make sure you always respond to their requests promptly, or they could lose their confidence in you. Keep the unit in good condition and develop a good relationship and communication with tenants. The better your relationship with them, the less likely they are to want to move.
The costs mount up when tenants move out, and you have to clean the unit, advertise for new tenants, do background checks and face the prospect of a unit standing empty. When tenants show signals that they may not want to renew their lease, you could respond by keeping the rent at the current rate or offering free utilities. Weigh this up against the cost of finding new tenants, and it could be worthwhile.
Reducing tenant turnover has a valuable ROI as it optimizes your cash flow, preserves your revenue, and maximizes the performance of your property portfolio.
Conserve water
Many property managers aren’t aware of how much water is wasted on their properties. Leaks in the plumbing can result in any profits going down the drain. It’s important to check for any leaks, even small ones and repair them speedily.
Property management services will keep on top of maintenance issues like leaks which can help to save you money. When tenants aren’t paying for water usage and pay a flat fee for utilities, they are unlikely to be as aware of their water consumption. To help reduce water consumption:
- Fine-tune toilets to make sure they only use the minimal necessary water levels.
- Install shower regulators, so you ensure each shower is running the same gallon per minute output to keep water costs down.
- Install aerators on bathroom or kitchen sink faucets to save water.
Increase energy efficiency
Electricity is an expense that can also quickly get out of hand, especially if properties have old appliances that aren’t energy-efficient. By installing energy-efficient appliances, energy efficiency will increase, and you will cut your monthly bills. Changing to LED light bulbs can also help. When your home contains energy-efficient appliances, it is a more attractive option to younger renters who value sustainability and prefer green options.
Appeal property taxes
Taxes are often the largest expense a property manager has to deal with on an annual basis. You may not be aware that you can appeal your property taxes, especially if there’s been a large increase. Property tax experts can help to ensure you are not paying more than necessary. They can identify factors that technically reduce the value of the property and find local loopholes. If your property is over-assessed, you may save much more in tax than you have to pay to a tax appeal analyst.
