As a real estate investor, you know that your short-term and long-term earnings are largely dependent on the strength and performance of the Boston rental market. The amount of rent you collect and the tenants you attract will really be influenced by a number of factors outside of your control.
However, there are many ways in which the return you earn on your investment is very much within your control. The way you finance your property, maintain your property, and work with your tenants will have a huge influence on what you’re able to earn in rent and over the long term.
We’ve put together five quick tips for getting the best return on your Boston investment property. If you can implement these, you’ll find that you’re able to earn more and spend less on your property.
1. Check Your Boston Rental Value
Pricing impacts what you’re earning.
This is true in an obvious way – the more you charge, the more you earn. But, it’s more nuanced than that. If your Boston rental property isn’t priced accurately, you’ll find you’re at risk for a long and expensive vacancy.
Vacancies will hurt the return you earn on your investment property, and it will be nearly impossible to recover the money you lose. One of the biggest mistakes we see investors make is to price their rental property too high. We understand wanting to earn as much as possible in monthly rent; you don’t want to devalue your property or lose what you could potentially earn.
Overpricing your property can be just as damaging and even more expensive. Today’s tenants are pretty savvy, and they understand the rental values in Boston. Make sure your property is priced competitively and that your rental value is aligned with what similar homes in your area are renting for. A well-priced property will always earn higher returns because you won’t lose money on vacancy, bad tenants, or tenant turnover.
2. Screen for High-Quality Boston Tenants
It’s pretty simple: good tenants earn you more money, while bad tenants cost you more money.
Placing well-qualified tenants allows you to collect timely and consistent rental payments. You won’t have to worry about vacancy loss, threats to your property, or the potential for tenant-caused damage. When you rent your home out to well-qualified residents, you will also have someone helping you maintain your investment by taking care of it, keeping it clean, and notifying you immediately if something is wrong.
Good tenants lead to higher returns on your rental property. You won’t have to worry about the cost of:
- Late and missing rent.
- Property damage.
- Lease violations.
To find the best possible tenants, you’ll need to have a rent-ready property and strategic marketing plans. Screen tenants carefully and in compliance with all fair housing laws. You want to know you’re renting to someone who is financially responsible, and with an excellent record of positive rental experiences in the recent past.
Retaining those tenants you work so hard to attract is also a great way to increase your ROI. When you can keep a good tenant in place and renew a lease agreement, you’re saving a lot of money on maintenance costs, wear and tear fixes and the marketing that’s required to show your property again and get it re-rented.
3. Make Maintenance a Priority
Maintaining your home properly earns you better returns.
Yes, it costs money to make repairs and to fund replacements. But, if you don’t do those things, you’ll find yourself spending a lot more later, and that’s going to eat into what you earn. It’s also going to create a situation where your property is more likely to deteriorate and lose value.
Be responsive to all tenant repair requests. Not only does it show your tenants that you care (hello, better tenant retention), but it also protects the condition of your home.
Preventative maintenance is especially necessary when you’re thinking about earning more in the long term. Have your HVAC system serviced once a year, get your gutters cleaned out, and have someone take care of cleaning and landscaping on an annual basis. Stay up to date on snow removal and pest control.
4. Invest in Cost Effective Improvements and Updates
It’s about more than just maintenance.
It’s also about keeping your investment property modern and attractive to tenants. Investing in cost-effective updates, upgrades, and improvements will help you earn better returns on your Boston rental property.
If you’re renting out a multi-family building, take a look at the parking area and ensure there is enough parking for your tenants and for visitors. Consider upgrading to in-unit laundry.
Make cost-effective updates that will help you charge more rent. For example, energy-efficient appliances are also good at attracting better tenants and increasing rents. Embrace technology. If you include free internet access or offer high-speed smart-home capabilities, you’ll be able to charge more.
Better floors, fresh paint, and updated hardware like faucets and drawer pulls will go a long way in helping you earn more rent, attract better tenants, and increase ROI.
5. Work with Boston Property Managers
When earning more and spending less is a priority, working with a professional Boston property management company is the best way to meet those goals. Your property managers will help you earn more by reducing vacancy, placing better tenants, and maintaining your investment for less. We have relationships with great vendors and contractors, we know the local, state, and federal laws, and we can protect you and your investment when things get challenging.
A lot of landlords shy away from professional management because they don’t want to pay that monthly management fee. Most of the investors we work with earn more on their properties, even with the management fee factored in. You have a lot to gain from the experience, resources, and relationships that a Boston property manager has.
If you’d like to hear more about increasing the returns you earn on your Boston investment property, contact us at Platinum Realty Group.