Despite the frigid conditions and threat of pipes bursting, the Spring apartment rental season is just weeks away.
Now is an opportune time for landlords, owners and investors to take stock of the units that will be available in 2025 and review their strategies for maximizing investment returns in the year ahead. This means evaluating income and expense items—rental rates and property operating costs—to ensure competitiveness in the marketplace.
Both sides of the ledger are important. Complacency can ruin return on investment when the goal is to not leave any money on the table.
Yet the execution of a sound rental rate strategy is the fastest way to increase a property’s value and income stream. If, for example, a property has not been owned and managed aggressively, rents could be significantly under market. Aligning rents with market conditions and competitive properties can impact income and profitability quickly and dramatically.
Owners of buildings with fewer than 12 units may fall victim to commodity-type pricing that provides a general idea of market pricing but doesn’t incorporate neighborhood-to-neighborhood or even block-by-block pricing nuances. A management approach that provides “boots-on-the-ground” knowledge and understanding of supply, demand and pricing trends can produce tremendous benefits.
Similarly, complacency can have a substantial negative impact on management practices and expense policies. Property and vendor management is a people-oriented business. Understanding the capabilities and personalities of vendors—including electricians, plumbers, carpenters, and painters—and matching them to the type and size of a building/property is important. It may help to ensure that vendors are responsive and capable of getting the work done to cause the least amount of disruption to the tenants.
A good manager takes tremendous pride in building a book of vendors: a team of relationships.
With the Spring rental season just around the corner, there is still time to implement a plan that avoids complacency and focuses on both sides of the accounting ledger and ensures money isn’t left on the table.