Owning property can make you feel like a king. You have your very own plot of land that is in your name. As an entrepreneur, there are limitless possibilities and opportunities that can come from your property. Whether it’s a small apartment complex or a mansion, there are ways to be smart on how you handle your funds for your property.
How to Fund Your Property
The most common method to fund property is to make contact with your local bank or another related financial center. But, getting approval for a loan has the minimum of having a credit score over 600. An equivalent would be about 10% on a down payment.
As you grow your property empire, it will start to cost more and more. So, we shall take a gander at intelligent thought processes to fund your property.
Funding Your Property
Perhaps the easiest way to avoid this problem is to find a tenant that is there to stay for some time. You can also encourage tenants to get renters insurance. Renters insurance is just what you think. The HO-4 is an insurance policy that protects your belongings in the case of natural disasters, theft, and other similar incidents.
The moment you learn that a tenant plans to move, put up listings that the room is available. Some areas will be in high demand, ensuring that interest can appear within minutes. Vacancy costs up to 8.3% of all potential revenue for the year. Another idea is to ensure that the vacant property should have something that makes it stick out. This provides more value to the property.
Minimize Turnover Rates
The cost of turnover can be staggeringly high. From the advertisement, fixing the rooms, replacing flooring, and more. But, this provides an opportunity. If you want to fund your property then you need to play by the people’s rules. Lowering the value of the property via lowering taxes may seem bad now, but allow it to ferment and you will see an increase in revenue.
All landlords want tenants that can take good care of their property and be on time with their payments. Do what you can to keep them. Yes, people move all the time for life reasons, but if they are moving because of a better deal by the competition, then you have a problem.
However, finances are not the only part of keeping your tenants. Customer service skills are vital to this line of work. These people are living at your property because they believe that you fund it and take good care of it. You back that thought process up by treating them with respect and ensuring that no issues are at hand.
Be Smart with Rent Pricing
Keeping the taxes down for turnover rates is a great idea. But, you can be even smarter with the rent. How?
Increase the rent on your long-stay tenants. Now, earlier it was written that you should lower prices, which yes is true, but here’s how you do it.
First, don’t increase it by tenfold. Increase it only around 1-3%. But, what you also do is provide an offset to other costs such as utilities. Inform them of an upgrade if they go through with the rental hike. If anything, ask them what they want completed to make the space more personal.
Maintaining that respect of boundaries with your tenant is a smart way to keep your tenants and fund your property.
Show Kindness on Late Fees
Everyone goes through life differently. We all have good days and bad. Some struggle while others do just fine. Regardless, there will be a time when someone can’t pay rent on time. It may be a sudden death in the family or a sudden loss of a job.
When these things happen, we need to lift each other up. So, give them a chance to catch up. It may hurt a little for a month, but you can bounce right back. However, this is still a business and it is still a relationship built on respect and trust. If a specific tenant does this constantly, then you have to put your foot down. Be vigilant and take care of your tenants.
Add Additions to Create More Revenue
There are multiple apartment complexes that have other ways to make money. For instance, the most common and popular would be laundry or vending machines. It creates more revenue for you and it allows a return on value.
For other locations, you can retain tenants by offering services for lawn and home care. Rather than having someone else take care of it, many would be willing to sign on.
These are just a few things that you can do to retain tenants and fund your property. It sounds like a hassle and it can lead to some obstacles on the road but what job isn’t? Being a respectable landlord and respecting your tenants shows that you mean business and take your job seriously. Having outrageous prices, poor customer service, and bad landlord practices is not going to do you any favors.