Whether you landlord yourself, hire a professional property manager, or are the largest rental company on the planet, there are ways to reduce the impact of problem tenants on income. The answer… simply know your customer. When you invest in rental properties, the plan is to ensure that the actual income is as close as possible to projected income. It sounds obvious, but there are steps required in renting to make it happen.
Below are the 4 parts to rental success and obtaining as much rental income as possible.
- 12 months of possible rental occupancy (times monthly rent)
- Any vacancy allowance (vacancy days calculated as a percentage of total rental days/income)
- The schedule rent that is collectable from the actual renter
- The actual rent collected
Let’s break it down into an equation:
12 months rent, ($1,000/month or $12,000/year)
(Subtract) Vacancy (one month vacancy or 8 percent a year)
(Subtract) Any collection issues (unpaid rent, evictions, etc.)
= TOTAL RENT COLLECTED
The longer a rental property sits vacant the more it cuts into income collected. There are ways to help fill properties faster and with more qualified tenants. The National Tenant Network calculates that $12 billion a year is lost in rental income due to poor tenant screening. This number comes from the costs of evictions, tenants show skip out on a least, and damages beyond wear and tear.
In compliance with the fair housing rules, every applicant must be treated exactly the same way , every time, for a property. If you are new to renting, or are looking into purchasing a rental property, hiring a property management company with ensure that you are staying compliant with regulations. Hiring a property management company will also ensure you receive the highest amount of total collected rent, and they employ people to perform background checks, fill the properties, and collect the rent for you. These steps can be very time consuming for an individual, but for a property management company that has processes in place for each step rest assure that you have a well screened tenant which will provide you the most rental income you can receive and less problems in the future.
To learn more about property management, renting out your property, and Renters Warehouse visit their website at http://www.renterswarehouse.com
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