Your rental property got another ticket from the city you don’t understand. You can’t seem to find and keep quality tenants, though you have plenty of applicants. You’ve paid three plumbers, but no one seems to know what to do about the basement drain. If these expenses are adding up and worrying you, you aren’t alone.
When your property is not providing the kind of income you were hoping it would, you’re usually not sure what to do about it or where to start. At Powell Property Management, we’re happy to use our decades of experience in the South Sound rental market to help you organize your thinking and make the most of your investment.
What is ROI?
If you’re interested in owning the most profitable rental property possible, it is wise to focus on increasing your return on investment (ROI). You calculate your return on investment by dividing the difference between your income and expenses over the total cost of your investment.
Here is a simple example:
After closing and repairs, you paid $300,000 for a property.
You made $25,000 in rent and your expenses, including taxes, were $5,000.
Your yearly ROI is 25,000-5,000/300,000 or 6.7 percent.
There is more to the equation of boosting ROI than increasing revenue or decreasing expenses. The magic is in the method. That’s why hiring a property manager can save you money and increase your ROI. You benefit from your property manager’s experience, expertise, and efficiency. This translates to profit.
How Can a Property Manager Increase ROI?
Here are some concrete ways in which a property manager can improve your ROI:
1) Marketing Expertise
A property manager has established channels to find quality tenants. They are well-versed in local advertising, so they know where to spend your advertising budget and what may not be worth the expense. A property manager in your area will understand what attracts good tenants and use their know-how to stage and list your property for quick and quality occupancy.
2) Finds Quality Tenants
A property manager can increase your ROI while seeking the right occupants for your property. No more wishing and hoping, internet sleuthing, or paying for background check services. A property manager has the tools to quickly and thoroughly vet tenants to ensure any serious applicant meets your rental criteria.
3) Keep Tenants Happy
Professional services keep tenants happy. A property management company has dedicated professionals who respond to tenant requests and maintenance concerns. This positions them to quickly and knowledgeably address any tenant concerns. Your tenants have access to the experts they need and don’t have to wait for you to make your way across town or find the right professional. Happy tenants stay longer, providing consistent income over time and saving you the expense of relisting.
4) Maintenance Cost Efficiency
Property managers have relationships with contractors to bundle labor. You are unlikely to beat the rates they secure for snow removal and lawn maintenance or specialized services like pest control. You will also see savings in larger repairs or upgrades, as a property manager is able to draw from their in-house expertise, then bundle contractor time and obtain wholesale cost on materials.
5) Time Efficiency
There are many ways in which the processes and policies that a rental property uses keep your property running efficiently. From quickly finding good tenants to handling small concerns before they become big, the timeliness that a property manager brings to the equation impacts your ROI.
And while we’re talking about time, consider this: your time is valuable. If you are spending too much of your time and attention on your rental property, you are not able to invest yourself elsewhere. Is the exertion of your effort in this area the best use of your resources? Could you make more if you invested it elsewhere?
6) Professional Perspective
There are many ways in which a property management company can use its professional insight to benefit your investment.
- Your property manager’s understanding of your local market and big picture rental market knowledge will allow them to craft optimal advertisements and attract excellent tenants.
- A professional property management firm has connections within the local rental and maintenance community. They know who to call for what, which saves you the time and expense of trial and error.
- A property manager is efficient with rent collection and has established channels to address late payment and pursue eviction if necessary. This keeps your investment profitable.
- There are more laws and regulations related to rental housing than many people realize. A property management company can help you avoid fines with their current knowledge of all state, federal and local rules that apply in your area.
Premium Property Management in West Seattle
At Powell Property Management, we have been providing premium property management services in the South Sound area for more than fifty years. We balance cutting-edge property management skills with experience and history. We would love to talk to you about how our property management services can elevate your investment properties in our area. Reach out here or give us a call today at 206.824.3733!