How To Avoid 5 Underlying ROI Killers For Everett Rental Properties

When investing in real estate, property owners benefit from monthly cash flow, price appreciation, and tax advantages! However, as with any investment strategy, there are always risks and unexpected costs that can hurt your return on investment. So what should property owners beware of to avoid income loss? Our Everett property management experts highlight five hidden investment property ROI killers (and how to avoid them) below!

1. Neglecting Maintenance and Repairs

Maintenance and repair costs can be some of the biggest challenges to estimate when buying an investment property. No matter the quality of a home, things are bound to break! Operating successful rental units requires keeping up with maintenance and repairs. Even if you’re reluctant to spend money on the repairs, the lease agreement and landlord-tenant laws require property owners to deliver safe homes for renters. 

While paying for repairs might stretch your budget, neglecting preventive maintenance and delaying repairs can lead to more costly issues and impact your returns. Ideally, property owners should set aside a reserve each month to budget for maintenance costs. You can then factor this expense into your budget to estimate a more accurate ROI. If you're looking for an ideal way to deal with repairs and maintenance requests, a property manager can also help manage budgets and reduce costs! 

2. Unexpected or Recurring Vacancies

Finding good rental properties means targeting locations that are in demand! When there is plenty of rental demand for rental homes, property owners have an easier time finding good renters to generate consistent income. However, even the best rental homes and locations experience periods of vacancy and lost rent. At times, property owners can deal with weeks or months without a renter and income!

To help minimize this ROI killer, property managers recommend budgeting for vacancy costs. This can be as simple as assuming that at least one month during the year could leave you without rental income after a lease ends. Then, to offset that loss, a property owner can apply tenant screening practices that help them place better tenants that renew their leases and set ideal rental rates to generate enough cash flow to offset a month without a paying tenant. 

3. Poor Communication with Rental Property Tenants

Proper communication with your renters helps ensure that both parties are aware of their responsibilities. Keeping in good contact with residents also helps build good relationships that keep renters happy! When residents don’t feel heard, they might withhold the rent until you respond or decide not to renew their lease. 

To improve communications with renters, respond promptly to a maintenance request, send prompt rent reminders, listen to concerns, and proactively reach out with notices or updates that could impact your renter. Ultimately, good communication can lead to higher tenant satisfaction and better returns!

4. Mismanaged Expectations

Are your real estate investment expectations realistic? Sometimes, a “bad” ROI is the result of poor planning or expecting more from a property than it can generate for you. For real estate investors, this can include expectations around rental income, operating costs, capital repairs, and renter retention. 

In other instances, missing timelines can impact revenue expectations. For repairs or property improvements, timing is critical! When hiring a contractor, any delays in their timeline could delay the date when you can start collecting rent. Dealing with timelines, projects, and vendors is an important aspect of operating successful rental properties, but it isn’t always easy. An Everett property management company can help you manage these projects to meet your budget and revenue expectations. 

5. Misaligned Goals

Are you tracking your real estate investing goals? Operating rental properties is a long-term investment strategy. Knowing where you are today compared to where you want to be several years from now can help you track income and returns that align with your goals. However, your goals and strategies must be reasonable based on specific properties that make up your portfolio as a whole. A company that delivers professional property management services can offer market insight to determine if your goals are realistic, then help you put plans in place to get where you want to be!

Avoid ROI Killers With An Everett Property Management Company!

With any real estate investment, there are always risks that can impact your bottom line. However, being aware of potential dangers and applying strategies to avoid them helps investors overcome revenue loss! The right Everett property management company delivers the experience property owners need to avoid pitfalls and boost returns for long-term success. 

If any of these issues sound familiar and could be impacting your bottom line, The Joseph Group is here to help! We deliver full-service property management, including maintenance and repairs, tenant retention strategies, expert marketing to minimize vacancies, and more. We also listen to your goals and put the best expert strategies in place to help you maximize returns. Reach out soon to learn more about how we can help!