Becoming a landlord can be pretty stressful. Not only do you have to take care of the advertising, maintenance, and permits so you can make it hospitable, but you have to do so while consistently turning a profit. How can you more easily make your rentals profitable without scaring away potential tenants?
Pick the Right Market
You must start by choosing who your apartments are for. If you are a new building with many amenities and special features, you may want to aim for middle-aged, affluent individuals. However, there is a huge market for affordability—young people, elderly people, and newlyweds can all be great target demographics to start with.
To make your apartments profitable, you are going to want to fill up the rooms as soon as possible. Ensure you are advertising online—particularly by using platforms that your target demographic will be searching. If they can find your complex, you may have an opportunity to sell well above what you thought possible.
Buy Multifamily Properties
You can also take your complex a different route. Multifamily properties are becoming more common and necessary for people to sustain their quality of life. Multifamily construction increased by 21 percent from 2016 to 2018. Complexes that have the budget for it can easily renovate a few of their apartments into one bigger one. The rent you can charge for Multifamily rooms far exceeds the profits of smaller apartments.
Unless you intend on doing this for good, you may want to stick to having just a couple of multifamily properties in your complex. However, you might see a need for developing more of the properties. Think about what would work best for you in the long run.
Place Utilities on Your Renters
Another way you can improve your overall cash flow is by placing utilities on your renters. You may be generous enough to pay utilities on behalf of your tenants, but this cuts your profit margins even thinner. Instead, you can place the burden of utilities on your renters. This may deter some people from renting with you, but not enough that you won’t have clients.
You can address the concerns of rising prices by starting the cycle at the beginning of a renewal. This way your tenants can have the opportunity to drop out long before it takes effect.
If profits are your main concern (and why would they not be) you now have a few solutions to making renting more profitable for you. Make it happen!
Read this next: Why You Should Look Beyond Single-Family Homeownership