When you put money into a rental property, the unspoken expectation is that you’ll get a decent amount of money out of it. Hopefully, this sum exceeds the cost of investment, meaning that you’ve made a profit on your venture. Your return on investment (ROI) is an important consideration when dealing with rental property or real estate in general. According to statistics, the current average annual ROI on a residential property in 2023 is around 10%.
We’re here to help you get the most out of your investment and maximize profits. So, how do you go about this? What can you do to lower expenses and increase profit? Let’s take a look at some practical ways to maximize your ROI.
Regular Maintenance & Checkups
This may sound like a no-brainer, but it’s critical to keep up with your appliances and utilities. Some landlords make the mistake of waiting until there’s a problem to fix it. This costs a lot more money in the long run, especially if there are significant damages. But frequent minor maintenance will ensure that you are saving money, which increases your ROI.
Competitive Rental Fees
There’s a difference between being competitive in your pricing and selling yourself short. Some landlords operate under the assumption that it’s best just to have a tenant occupying your space. But it’s much better for your ROI to price yourself at or just below market value. No doubt someone will come along who’s willing to pay for your rental space.
Fixed-term leases can be an essential part of achieving success as a landlord. Because the tenant is contractually bound to a certain period of time with a firm end date, you have time to plan ahead and find a suitable replacement. This eliminates unproductive and unprofitable gaps when your rental space is sitting empty.
Furnished Rental Space
This may cost you more money up front, but it will be a fantastic investment in the long run. Providing a fully-furnished rental space will increase your pool of potential tenants. People who are looking for a short-term rental typically won’t bring their own furniture. Furthermore, staging the space and making it visually appealing from the jump will help you net a better monthly rental fee.
Make Your Property Work For You
Attaining a solid ROI will make your investment well worth the extra care and effort that you put in. Any way that you can minimize long-term costs and boost profits will positively affect your return on investment. For more tips on the real estate market and rental properties, follow the Talley Properties blog. Contact us today for more information on Charlotte’s best property management!