Struggling with Your Rental Property? Steps to Take
Many people think that rental property apartments are a risky business with little return. However, this is not always the case. In fact, according to Investopedia, the average gross yield for apartments in the U.S. is 5.4%, and the net yield (after all expenses) is 3.8%. These statistics mean that if you purchase an apartment building for $100,000, you can expect to earn an average of $5,400 per year in gross income and $3,800 per year in net income (assuming you have no other expenses related to the property).
However, there might be points where you might struggle, especially if you’re a first-time landlord. You will have to deal with rowdy tenants, noisy neighbors, and unruly guests. Not to mention the wear and tear that naturally occurs over time. So, what can you do when you’re struggling with your rental property? Here are a few steps to take.
Invest in Marketing
Someone will always be looking to rent if you have a rental property. However, you must ensure that your property is visible to potential renters. The best way to do this is to invest in marketing. You can start by creating a website for your rental property. Include high-quality photos and videos of the units and detailed descriptions of the features and amenities. You should also create social media accounts for your rental property and post regularly. In addition, you can run ads in local newspapers and online classifieds websites.
It might mean investing in a professional photographer to take pictures of your units or hiring a web designer to create a website, but it will be worth it in the long run. However, investing in marketing should become a traditional strategy because other rental properties might follow suit. It will be necessary to evolve and keep up with the latest marketing trends to ensure your rental property is visible to potential renters.
Hire a Rental Property Manager
If you’re struggling to keep up with the demands of being a landlord, you should consider hiring a rental property manager. A rental property manager will take care of all the day-to-day tasks, such as marketing your units, screening tenants, collecting rent, and dealing with maintenance issues. This step will free up your time to focus on other aspects of your life. In addition, a rental property manager will have the knowledge and experience to deal with difficult situations, such as evictions.
Of course, rental property management services will be a long-term investment. However, it will be worth it in the long run. Not to mention, you can find a property manager within your budget.
Increase Rent Gradually
If you’re having trouble covering your expenses, you should consider increasing rent gradually. This approach will allow you to avoid potential conflict with your tenants. In addition, you can increase rent gradually over time to keep up with the cost of living. For example, if your units rent for $1,000 per month, you can increase the rent by $50 per year. After a few years, your teams will rent for $1,100 per month.
Of course, you must ensure that your rental units are still competitive with other rooms in the area. You don’t want to price yourself out of the market. In addition, you should give your tenants a heads-up about the rent increase so they’re not caught off guard.
If you’re struggling to make ends meet, you should consider refinancing your rental property. This option will give you a lower interest rate and monthly payment. In addition, you can use the extra cash to make repairs and renovations to your units. This step will help you attract and retain tenants.
Of course, you must be careful when refinancing because it can extend the term of your loan. This step means you’ll be paying more interest in the long run. However, if done correctly, refinancing can help you save money in the short term.
Talk to Your Tenants
If you’re struggling to keep up with your rental property, you should talk to your tenants. They might be willing to help you with tasks like marketing and repairs. In addition, they might be willing to pay a higher rent. However, you must be careful when asking for help because you don’t want to take advantage of your tenants.
In conclusion, if you’re struggling with your rental property, you can take steps to ease the burden. Investing in marketing, hiring a rental property manager, and increasing rent gradually are all viable options. It would help if you also consider refinancing your loan and talking to your tenants. These steps will help you keep up with your rental property and avoid potential conflict.