Increasing profits is a top goal for property management or real estate companies of any size, from a big firm with thousands of flats and holiday rentals to small businesses with a single property. But as your portfolio expands, you need to find better ways to remain profitable and competitive. Here are some strategies to achieve those goals.
Invest in Cloud HRMS
As you grow your portfolio, you’ll need to find more cost-effective ways to manage multiple properties, as well as the people you employ. On top of rents, maintenance and individual demands from tenants, the administrative aspects of your business will cost money, too. To save money on recruitment or payroll, companies choose cloud HRMS as an alternative. If you have an existing property management software, cloud HRMS is a valuable application to integrate.
Vacancies are some of the biggest sources of negative ROI in real estate business. By decreasing vacancies, you don’t have to deal with costly turnovers, too. The best way to minimise vacancies is to find long-term tenants and have a strategy in place to keep occupancy at 100%. You can do so by posting ads the moment a tenant expresses plans for moving out.
Increase Rent Strategically
Many real estate businesses hesitate to raise rents out of fear of losing long-term tenants. But one way to grow your revenues and remain competitive is to increase your rents, but only if you have good reason to do it. For instance, inform your tenants that the increase will coincide with upgrades to the home or result in better amenities and utilities.
Tenants are willing to pay up if they get something out of the deal, so be sure to communicate this before you renew the fees.
Before making a move, study the competition by researching sites like Zillow, Craigslist or Rentometer. It is important to have knowledge of your property’s value relative to properties in the neighbourhood.
Diversify your Revenue Streams
Adding other sources of income within your rental property is a wise move. Tenants pay a premium on convenience. If you’re managing a multi-family complex, take advantage of the space and add services like vending machines or coin-operated laundry. These inclusions may even grow your property’s resale value or return on asset value. More importantly, these additions provide revenue.
Running a successful real estate business doesn’t always entail acquiring a large number of properties. More often than not, operating a small number of properties intelligently can provide bigger returns.