Now that we are getting our new 2017 calendars in place, the emphasis turns to resolutions for the New Year. Resolutions are a great idea if they really are followed through. Follow-through..that is the hard part and where the resolutions die. I think it makes a difference if your resolution is born from previous experiences and lessons. A resolution has more chance of succeeding when it is based on a goal that may already exist. For example, a resolution that has a chance is "I am going to increase my current daily run by half a mile in 2017." Resolutions have a more difficult road to success when they are simply "I am going to start running in 2017." That resolution is non-goal based with no past experience. That type resolution won't make it to the second week of the year!
Owning rentals should include a plan for improving success. Your team should know those plans. Here are some ideas gathered from my past year of experience. Maybe you can incorporate something into your rental property resolutions.
Increase returns by reducing tenant turnover The simplest thing you can do to increase your returns in 2017 is keep your tenants. There are so many ways to do this but simply, just ask yourself, would I live at this home if the owner maintained it in its current condition? When you consider the cost of turnover and vacancy, it should make replacing a broken appliance a very simple decision. Or doing whatever can be done to treat for unwanted pests. Or provide hot water on a consistent basis.
If you have a tenant that is paying the rent on time, and showing pride in how they keep the home, why would you spend even a minute deciding about a broken stove or hot water?
Offer your property for rent with a goal of longevity. When you have a vacancy, now is the perfect time to update and make the property modern and attractive. Add features you would want if you were going to live there. For example, I see more potential tenants interested in having a security system. This seems reasonable. I have one and make sure my kids do also. Installing a security system does not mean you have to pay for the monthly monitoring. Set it up so the system is there and your new tenant just has to call and set up an account. They are a great feature that will appeal to tenants and just may reduce your turnover.
Invest in service plans for the HVAC system. A couple of nights ago, on Christmas eve, a few emergency issues occurred. This happens every year. Our owners that have invested in the service plans from the HVAC companies received service on Christmas Eve and their tenants are thankful. The service calls are discounted also. Doesn't matter the holiday, these events seem to always occur at the worst time. Chances are when they occur at your rental they are also occuring at other homes. Remember our goal of increasing returns by reducing turnover? Prompt service when essentials fail helps a lot in achieving that goal.
Be realistic about tenant's and exterior maintenance If your rental does not have a place for equipment to be stored for exterior maintenance, be realistic about the way the exterior may end up looking. Even with storage, many tenants will never get all the leaves out of the gutters and branches off the roofs. You probably do not want tenants climbing around on the roof anyhow (call your insurance agent and ask). Many owners believe exterior maintenance can be totally deferred because they have a tenant to handle it. It will never be done to your specifications and the home will lose curb appeal at best. At worst there could be problems related to improper exterior maintenance. If we suggest that professionals are needed, consider we have some experience that leads us to recommend you make the investment.
All the above are some of the lessons learned in 2016. They can all be managed in 2017 to bring you, the rental owner, increased returns. Returns both in your cash flow and when you decide to sell. We want to be your partner through this process.
Happy New Year and as always, let me know if you want to discuss your path to increasing success!
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