Bona Fide Tips to Maximize Your Rental Property Income: Part 2
2. Competitive Pricing:
Have you ever wondered why your vacancy rate in Burbank is higher than other rental properties in your area? Maybe you need to re-evaluate your pricing and reduce your rent. While it may seem like reducing rent will do more harm than good, it is actually better for you in the long run. In fact, having competitive pricing is one of the best-kept secrets for effective rental property management.
Reducing your rent will get your more tenants, quicker. This will help you avoid lost revenue due to prolonged vacancy and turnover. Check your local commercial real estate listings and reduce your rental price by as much as 5%. You will automatically see an influx of new tenants getting in touch with you and more people will respond to your ad. Additionally, this will also help you save on advertisement costs. The longer the vacancy, the longer you have to run ads. As soon as the vacancy is filled, you can stop running ads.
So, in retrospect, the reduced cost of rent will be compensated by lower vacancy rates, reduced turnover and less money spent on ads.
3. Strategic Increments:
The hallmark of being a good commercial landlord is strategic thinking. Just because you are providing competitive pricing, it does not mean you shouldn’t increase the rent for your long-term tenants. If you are strategic, you can easily impose rent increments of 1% to 3% for your long-term residents while still remaining within the spectrum of competitive pricing.
If you have good relationships with your tenants and they value your input, your tenants will be more than likely to oblige to a rental increment if it comes at a time of any sort of work being done on the rental property. For example, if you have a paint job or any sort of maintenance work upcoming, be strategic and schedule it at the time of lease renewal.
At the time of lease renewal, propose the increased rent in reference to the maintenance work being done. This way, your tenants will happily agree because they will feel like they are benefiting from the deal too. Not only is this method of increasing rent strategic, it is also reasonable and will help you maximize the income from your rental property.
By utilizing these simple yet effective landlord tips, you can always stay one step ahead of your competitors in the area!
