Increasing Property’s Return Checklist
1. Maximizing Rental Income
- Regular Rent Review: Adjust rents annually rather than making large increases sporadically.
- Property Upgrades: Enhance property features (e.g., adding air conditioning, a dishwasher) to justify higher rents.
- Competitive Pricing: Ensure rents are aligned with market levels.
2. Minimizing Tenant Turnover
- Long-Term Leases: Aim for longer lease agreements with reliable tenants.
- Property Maintenance: Keep the property in excellent condition.
- Responsive Management: Address tenant concerns promptly.
- Advance Marketing: Advertise vacancies early to reduce income loss.
3. Exploring Property Development
- Subdivision Potential: Consider subdividing large blocks for additional income.
- Local Council Consultation: Check with local authorities for development permissions and guidelines.
- Risk Assessment: Be aware of the increased risks in property development.
4. Banking and Financing
- Regular Bank Review: Contact your bank periodically for better deals.
- Comparison Shopping: Every two years, compare your current banking deal with the market.
- Service Consideration: Weigh interest rates against other banking services.
- Exit Fees Check: Before switching lenders, check for any pre-payment penalties.
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5. Maintenance and Renovation
- Curb Appeal: Enhance the external appearance of the property.
- Key Renovations: Focus on updating bathrooms and kitchens for the best ROI.
- Security Upgrades: Consider security enhancements in high-crime areas.
- Landscaping: Improve property aesthetics with cost-effective landscaping.
6. Reducing Operating Expenses
- Expense Review: Evaluate and find areas to cut operating costs.
- Utility Savings: Explore energy-saving measures like solar panels.
- Vendor Competitiveness: Regularly request bids for services to ensure competitive pricing.
7. Maximizing Tax Benefits
- Understanding Tax Incentives: Familiarize yourself with relevant tax deductions and benefits.
- Depreciation Schedule: Have a professional prepare a [depreciation schedule](Real Estate Glossary D [Part 3] for tax purposes.
- Capital Gains Strategy: Be aware of capital gains tax implications and strategies.
8. Being Prepared to Move On
- Market Monitoring: Keep an eye on neighborhood trends and be ready to sell if the area declines.
- Investment Reassessment: Regularly assess the performance of your property.
9. Adding Value Through Change of Use
- Land Use Optimization: Seek approvals for more productive land use.
- Conversion Opportunities: Explore possibilities like converting buildings to higher-value uses.
10. Effective Property Management
- Management Quality: Ensure your property is managed efficiently, whether personally or through an agent.
- Manager Accountability: Be ready to change managers if performance is not satisfactory.
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