Generating enough ROI for a rental property is a critical balancing act. Property owners have to find the right balance of costs vs. income to balance the ROI for an investment. However, hidden investment property ROI killers will sink your income fast, but owners can keep income flowing if they know what to watch out for. The best property management Seattle, Wa offers lists the top five ROI killers that you should be on the lookout for. Check them out below!
1. Being Out of Touch With Your Goals
When choosing investment properties, the best property management companies can tell you that it's vital to have a strategy and clear goals. Property owners need to know how much cash flow the property can generate and make sure it fits with long-term income goals. To determine ROIs and evaluate potential investments, you may need the input of a Seattle property management company to determine the answer. Property managers can run a rental analysis to see what a rental unit could generate and if it would be worth it.
2. Neglecting Maintenance Issues
No matter how new or old your property is, there will be times when something goes wrong, and you get a maintenance request. By law, a property owner must make reasonable repairs to make the place safe and habitable. While neglecting critical repairs can make tenants unhappy, it can also hurt your bottom line.
Delaying maintenance or repairs can cause a problem to get worse and become a more costly issue. Plus, unhappy tenants often retaliate by withholding the rent or choosing not to renew their lease at the end of the term. When these things happen, real estate investors lose money and see lower ROIs. If you're overwhelmed by too many maintenance requests and not enough time or resources to take care of them properly, a company that delivers professional property management services can help!
3. Too Many Vacancies and Costly Decisions
Every investor will have vacancies from time to time. However, how you handle these vacancies can determine what happens next. For example, if you fill a vacancy right away, then you avoid weeks or months without rental income—but what happens if you don't fill the vacancy right away?
Are you prepared for an extended vacancy with cash reserves to cover rental property expenses? If not, you might be tempted to make costly decisions to fill a vacancy without a thorough tenant screening process that leads to placing a bad renter in your property. You might also lower the rent to fill the vacancy, but then you're locked in for a lease term with reduced rental income. Panicked decisions to fill a vacancy can lead to income loss or a costly eviction process. If you're struggling to find a good tenant, a property manager can help with expert marketing and tenant screening to reduce vacancy times.
4. Poor Communication
Since tenants are the foundation of your steady income and ROI, building good relationships with each resident is essential. When tenants become unhappy, they may take their business elsewhere, leaving you with a poor resident retention rate and low ROIs.
Poor communication can get in the way of a good relationship between a landlord and tenant. The right property managers can help you communicate important matters upfront and establish an open line of communication. A property management company is also equipped to respond quickly to maintenance requests or other issues 24/7.
Rental owners should set communication guidelines by letting renters know how to contact you for non-emergency requests during business hours or how to reach your property manager. If an emergency arises and they have a maintenance request, you or your property management team should be available right away.
5. Failing to Set Expectations
Another mistake that landlords sometimes make is failing to set expectations with a tenant. To effectively manage renters fairly, it's important to review the lease agreement at signing, then enforce the rules consistently. Residents who understand what a property owner expects are more likely to follow the rules and contribute to a positive landlord-tenant relationship.
Setting expectations is just as important for contractors and maintenance staff as it is for tenants. Real estate investors need workers and vendors to know when and how to fulfill their tasks to keep tenants happy and properties in excellent condition. Developing written guidelines or policies helps everyone understand their roles and responsibilities. If you're not sure how to set and manage expectations for vendors, property managers can handle this for you! They have a network of vetted contractors to handle maintenance tasks and other responsibilities to maximize returns for investors.
Avoid ROI Killers With the Best Property Management Seattle Offers
If any of these ROI killers sound familiar, it's time for professional property management services! The best Seattle, Wa property management company helps property owners avoid issues that can lead to lower returns and lost rental income. If you're ready to learn more about how full-service property management can help, reach out to Real Property Associates soon!