When buying or building your rental property, your primary goal was to create an extra revenue stream. That’s why you have to do everything legal and ethical to optimize your property’s return on investment (ROI). ROI is the revenue that your rental property generates over a specified timeframe vis-a-vis the total investment made. A higher real estate ROI indicates a healthy profit margin. The inverse is also true.  You can even use modern technology like a net present value calculator to help you determine the potential roi of a rental property so you can be sure that it would be a successful investment. That being said, what is a rental inspection and how can you maximize your rental property ROI?

• Always keep the property in top condition

Don’t wait until the property starts to fall apart or tenants’ complaints pile up for you to start maintenance or repair work. Also, don’t assume that tenants will willingly handle maintenance and repairs around the property. You have to be a hands-on and proactive landlord.  At the very least, schedule regular inspections and fix small faults before they blow up into major problems. A wait-until-it-breaks approach can easily precipitate costly emergency repairs. A small water leak or damp problem, for example, can quickly morph into a serious mold problem. Tenants in most states are allowed by the law to terminate rental agreements and move out due to mold build-up. That can ruin the reputation of your property and dent your ROI. Exploring comprehensive property management strategies is crucial for maximizing rental property ROI. Consider engaging with professionals who specialize in milestone inspections and reserve studies, such as those offered by Florida Engineering.

• Consider refinancing your mortgage

Mortgage refinancing can be inconvenient, but sometimes it results in improved ROI. For starters, refinancing means taking a new mortgage and using it to clear the old mortgage, so you’re left repaying the new one.  Let’s explain this using a hypothetical example. Assuming you took a 30-year fixed-rate mortgage 10 years ago at 10% interest rate. This means you’ve already repaid the mortgage for 10 years. You have 20 more years to go. Let’s now assume that mortgage interest rates have dropped as a consequence of prevailing economic conditions, say to 5%. This means you can reach out to your lender and request them to refinance the old mortgage (the one attracting 10% interest) with a new one (at 5% interest rate). Note that you have already paid a third of the original mortgage over the last 10 years (You were to repay the remaining two-thirds over the next 20 years). That means your new loan will be slightly over two-thirds of the old one. You can afford to repay it within 20 years, at a reduced interest of 5% instead of 10%. This will lower your repayment installments and consequently improve your monthly profits.

• Invest more to reap more

Investing in your rental property is a sure way of attracting higher-quality tenants, which allows you to raise the rent. For example:

• Instead of blank walls, how about furnishing the house with decorative wall art? You can then add high-end furniture, curtains, rags, etc. to make the property more appealing to high-end clientele. 
• Invest in the Internet of Things (IoT). IoT enhances home security & safety, overall functionality, and luxury. High-end tenants don’t mind paying extra for added security and comfort.
• Improve the property’s curb appeal, e.g. by replacing the siding, roof, and/or floor. Aesthetically-appealing rentals attract higher rent. 

• Hire a property manager

This may seem counterproductive because you’re trying to save money, not add more people to the payroll. But it is not. A professional real estate management company does nothing else except manage properties. Such a company has all the expertise, experience, and knowledge needed for effective property management. You can leverage their expertise to maximize your rental property ROI in so many ways:

• Property managers know the ins and outs of rental property repairs and preventative maintenance. This means your property gets timely repairs from professionals, keeping it in perfect condition at all times.
• They have a deep understanding of the local market, which means they have the formula for the perfect pricing for your rental. 

Note: Unreasonably high rental rates scare off potential tenants while unreasonably low rates result in unwanted revenue loss. 

• They know where to find reputable and affordable Cincinnati roofing contractors.
• They can handle tenant screening for you to ensure that only high-value tenants rent your property. 
• Property managers know the ins and outs of rental property marketing. They will design advertisements and place them in all the right places, enhancing your property’s visibility in the market. They can create compelling listings that guarantee high occupancy and maximum ROI.
• They understand the ins and outs of the local and federal legal framework that regulates the local rental market. You can, therefore, trust them to ensure legal compliance and prevent hefty fines and legal fees that could stem from legal mistakes in your rental property.
• They have the expertise and tools for routine property inspection, which can guarantee tenant safety at all times and save you from costly lawsuits. They can, for example, investigate smells, detect leaks, and investigate cases of mold build-up.

Final word

If you’re a greenhorn in real estate management, you may not be able to make the most out of your rental property. You need to work with skilled professionals for optimal ROI. Hire a professional manager to handle all management issues, a professional to handle repairs, and so on.