As a real estate investor, you buy properties and rent them out in order to make money. There are things you can do and problems you can avoid that will increase the return you earn on your investment property. Start with these three tips for maximizing ROI with your Miami rental home.
Price the Property Correctly
Pricing is critical, and something you need to establish before you even list and advertise your home. You should consider the rental price you’ll get even before you buy an investment property. Make sure you’re pricing competitively; if you price the home too high, it’s going to be vacant for longer, and you’ll lose more money than you would by dropping the price by $50 or even $100.
A good property manager can analyze the local market and provide a comparable rental analysis which will show you where your property falls in terms of rental value. Remember that great tenants have options, and they also have access to information. If your home is overpriced, they will know it, and they won’t bother looking at it.
Focus on Tenant Retention
In addition to vacancy costs, turnover costs can kill your ROI. Avoid those turnover costs with a tenant retention plan. Treat your tenants like the paying customers they are. They deserve your respect and your attention, especially when things go wrong. Respond to their maintenance requests immediately, make it easy for them to pay rent, and communicate with them professionally and respectfully. If you’re able to retain great tenants, you’ll earn a lot more by avoiding turnover costs and limiting property damage.
Take Care of Preventative Maintenance
Deferred maintenance is expensive, so if you want to increase your ROI, make sure you’re taking care of small repairs while they’re still easy to fix. Schedule routine inspections and updates to your major systems. For example, cooling systems work extremely hard in the Miami heat. Make sure you have an HVAC contractor come out once a year to check and service your air conditioning system. This will save you money by avoiding expensive repairs and replacements in the long term.
