When you own investment properties, you want to find ways to maximize your profit so you can make more with less. While there are some things you cannot control, there’s still plenty that you can control. As a property owner, it’s important to understand your limits and focus on where you can improve and grow your business.

Keep the prices right

You cannot control the average rent in the area where you own rental properties. With few exceptions, you need to keep your rents within range of the average or people will go for cheaper options instead. Similarly to house sales, the area dictates the prices. You can choose to buy properties in high-end neighborhoods, but the competition will be similar regardless of where you go.

You can control the quality of the properties and the quality of the management. Within reason, people will pay more in rent if the properties are beautiful and consistently well-maintained. However, the more properties you own, the harder it can be to stay on top of everything that needs to be done.

Use modern resources

Managing rental properties includes keeping all tenant files organized and accessible. You can maximize profits by ensuring you’re receiving all the rent you should be receiving, getting rid of tenants that do not pay their rent, and getting rental units ready to rent quickly. But you likely knew that — the question is, how can you do all that more efficiently?

Software programs like Turbo Tenant allow you to track everything that needs to be monitored and receive daily updates on what needs to be done. It can save you a great deal of time and frustration, while also allowing you to make sure money isn't being wasted by improvements taking too long or properties sitting empty for too long.

Landlord software can help you track all maintenance requests and the work being done to respond to those requests. When you build a reputation for maintaining your properties at a high level and responding quickly to maintenance requests, your tenants will want to stay long-term, which means they will pay their rent every month on time to ensure they can continue living there.

Fine-tune the property

Another way to maximize profits is to ensure your properties are nicer than the other rental in the area. There are lots of online resources that can provide home design inspiration for you when preparing your properties for rent. You can offer properties that are furnished and decorated, or you can provide properties that are subtly but well decorated, allowing tenants to customize the look of the place with their own décor. Even something as simple as installing ceiling fans can make a huge difference to potential tenants.

Too often, landlords choose the cheapest route to prepare their properties for rent because they think spending less is the key to maximizing profits. While budgeting and being realistic with home improvements is important, providing a better-quality product allows you to charge a premium price for it. Charging more for a nicer property works in nearly every market.

In many cases, a landlord who’s willing to work with tenants on their deposit or provide a level of understanding if they’re a little late on their rent will have more loyalty than other landlords. While some will argue that flexibility is a dangerous practice, maintaining tenants will maximize profits. Communication between landlords and tenants is so important because it avoids costly issues down the line. 

Every time a tenant moves, the property will need to be cleaned, repaired, and marketed, which all costs money on top of the money being lost from the empty apartment. Working to maintain tenants is a great way to reduce expenses and maximize profits.