Sunday, January 16, 2011

3 Major Profit Enhancers for free!!!!

The single most expensive annual cost an investor/landlord faces is an apartment "turn".  When a tenant moves out there are many costs to bear.  Painting.  Cleaning.  Maintenance.  Advertising.  Lost rent.  Rental fees.  Heating.  Electric.

Avoiding those costs is, strategically, is perhaps, one of the most effective ways to add to the bottom line.

Most sophisticated landlords/investors have a budget.  In that budget is a line item for maintenance and/or improvements.

Part of the tenant screening process should be determining what skills your tenants have.  I've had tenants that were very competent carpenters, plumbers, painters, etc.  Not only should this be part of your application, it should be part of the "showing process" - what improvements would you make to this home?  What do you think it would cost?  Would you be willing to make that improvement if I were to pay for the cost of the materials?

If you as a landlord can screen would be tenants for their abilities and desires to improve the property - and then support them in doing so - there are many benefits that accrue to you.

1)  You can save on the cost of labor - essentially getting free labor.
2)  You can potentially avoid turnovers - tenants that are vested in their homes and have the improvements they like will tend to stay longer.
3)  You can get improvements done to the home while the property is productive  - i.e. rents are coming in.

A big part of your tenant screening and relationship strategy should include using the maintenance  budget to insure you maximize those benefits.

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