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In this article, we’ll talk about 6 things you can do to scale returns from your rental property. Here they are:
Get Your Location Right
A lot turns on the neighbourhood in which your home or office block is located. A great place to purchase or build for rent would have a lot of demand for residential or commercial space; a sign of this would be low vacancy rates. Also look out for things like decent amenities, fine educational institutions, and a continuously increasing property value in the area. The first two are advantages that tenants will want to enjoy; the last one is great for your investment.Decide on a Rental Rate
When trying to nail down a fair rental rate for your tenants, weigh up things like the current rates being charged by similar properties in the neighbourhood, the income of the individuals or families you’d like to attract, and how long it’ll take for you to recoup your initial investment. In the end, it’ll be up to you to decide. Be careful to straddle the line between affordability and good returns tactfully.Screen Prospective Tenants
Another thing you ought to consider is what kind of tenant you’d want. If maximizing ROI on your property investment is a top priority for you, your tenants must be able to pay the rent you set as and when due. That means they’ll have a stable source of income and are earning enough to meet their financial obligations to you as their landlord. This is something you should ascertain before letting them become your tenants.Sign up for the Connect Nigeria daily newsletter
Work with a Property Manager
If you can’t actively watch over the daily happenings at your property or meet the tenants’ needs, you should hire a property manager to do these things. Their job description will depend on how much of the management and maintenance of the house or office you’re outsourcing to them. They may handle things like getting plumbers to fix broken pipes, engaging vacating tenants, and collecting rent. Employing a qualified person to take on these duties ensures that things run efficiently even in your absence.Pay Attention to Your Financials
It’s not enough to set rates and collect rent. You should continually review your numbers to ensure that you’re always turning a profit. Sometimes you’ll have to raise your charges to track inflation or growing expenses, for instance. Of course, you’d want to give your tenants prior notice before changing their fees.Monitor Market Trends
Inflation or soaring expenses aren’t the only things you should be keeping tabs on. You also have to find out what landlords with similar property are charging their renters over time, and how the financial value of their buildings change too. More broadly, economic indicators are also worth watching. For example, if most experts forecast a recession to happen shortly, you may have to consider reviewing your rates, and other factors held constant.Register to attend the CN Business Mixer
Final Words
Staying on the path of maximal returns in real estate is sometimes hard to achieve. Factors such as economic and market conditions, tenants, and indiscretions conspire to make property investment a rough ride. But if you work with the tips we’ve run through here, you’ll cut out losses and record great yields for every naira you’ve poured into your property.Got a suggestion? Contact us: editor@connectnigeria.com
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