If there was one single factor that was most critical to maximizing rental property returns for real estate investing what would it be?
Accurately assessing repair costs is crucial and so is marketing, thoroughly screening tenants and good property maintenance but perhaps most essential of all is locking in long term tenants.
Why are long term tenants so crucial for maximum real estate investing profits?
Long term tenants means consistency of cash flow, no months without income during vacancies, no having to frequently remodel in between tenants and not expenses associated with sourcing new tenants who you aren’t even sure will pay.
However, maintaining long term tenants requires loyal and happy tenants. Happy tenants who will also refer other good tenants, reducing the expenses and increasing profits on other investment properties too for compounded results and enhanced returns.
What does it take to maintain happy and loyal tenants?
For a start it means great customer service. Fortunately with the state of today’s property management industry real estate investors shouldn’t find it hard to shine in this area.
However, it will require competent assistants to answer tenant calls who believe in your vision and responding quickly to issues and requests.
It also means having the capability to make repairs or get handymen mobile quickly. This can take a little testing but should be one of your major deciding factors when selecting contractors or home warranty plans.
Being flexible and willing to go the extra mile is also smart real estate investing business. Some may not see the justification or need for this at first but the proof is in the bottom line numbers. For example; if you have a really great tenant who normally always pays on time but has a real emergency one month will it really kill you to waive the late fee, even if you’ve earned it? Perhaps even helping with additional improvements like low cost window treatments and spending a few extra dollars on landscaping to make it a home they are really proud of will be money incredibly well spent.
