Essential Investor Habits for Reliable Condo Revenue
There are some basic golden rules when it comes to investing in condos that investors should follow.
Doing the math is the key to any investment decision. That's the same if its in stocks, collectibles, or real estate. When it comes to ensuring a good investment, you must deduct the regular maintenance charges, fees of association, any taxes, and be prepared for any changes or expenses in the value of the property and your planned rental charges.
Those first steps aside, there are several rules that all condo investors should get used to following with an army drill-like routine to ensure profitable revenue.
This piece highlights the five key tasks that all successful investors will follow.
1. Schedule Regular Maintenance and Upkeep
Don't leave it until things break down, as it can get expensive. A regular schedule of inspection and maintenance of the property, plus periodic renovations will increase the appeal to renters, and get you a good name in the business. It also allows you to maximize the value of the unit and the rent you can charge.
Not only does a good-looking and well-maintained property demonstrate that you are a conscientious landlord, but shows that you put effort into, and have a sense of pride, across your properties.
The basics of maintenance are pretty straightforward. Ensure the windows are regularly cleaned, look at fittings like door handles and knobs that can show wear over time, it is also critical to check that fire and CO2 detectors work.
If there are any dents or holes in the walls or skirtings, have those fixed. Finally, when it comes to turnover between long-term tenants, have the condo painted and professionally cleaned. These minor tasks and regular renovations do cost money, but minimize expensive repairs, and will ensure your investment returns a maximum profit.
That will bring a steady stream of tenants wishing to rent from you, which means less empty properties and a strong, long-lasting source of revenue.
2. Build Your Own Brand
Every business is a brand, and as a condo investor, you should do just the same. The most successful businesses find their niche and cater to a particular audience, which is what you should do.
Create a persona of your ideal customer, consider their lines of work, typical age, income, and lifestyle. Go out of your way to appeal to these people. Research the type and location of condos that sell to similar people, then create a business and marketing plan to ensure you are renting the right kind of property to the right type of person.
Businesses also use what is known as a SWOT (strengths, weaknesses, opportunities, threats) chart to highlight how they could do better. List your own personal strengths and weaknesses when it comes to business, and look at the market for threats and opportunities in your area.
If you're top dog in one area, then how about expanding to new territory, or if you see lots of new builds coming in a saturated area, perhaps it is time to move slowly elsewhere.
Play to those strengths and get others to handle your weak spots, like maintenance or accounting.
For example, any contractor can fix a leaking faucet or oven in about a tenth of the time it takes most of us. Let the professionals do that work, while you concentrate on adding more condos.
You might like the personal touch, but that doesn't mean you have to do everything.
3. Take A Proactive Role
Decision making can be a time-consuming role in any business, but when it comes to real estate, you need to be proactive. If you see a property that's a bargain, you need to act fast and buy it, otherwise, someone else surely will.
After proper analysis of course!
At the other end of the renting process, when someone gives you their notice, don't hang around waiting for a new renter to magically appear. Get the advertising in place, that same day, and get to your new tenant maintenance action plan.
Of course, if a property seems too good to be true, it probably is. So never make a rash choice, but if you have an appraiser or property inspector on hand, get their opinion. Being inactive will mean others are taking advantage while you sit still. They will take advantage of opportunities that you are missing.
Not every project will be a success, but developing a good sense of when to strike will help your business.
4. Learn Something New Every Day
Any businesses is a constant learning process, so take the time to educate yourself.
Condo markets are always in a state of change, keep your ear open for new locations, legal changes, or updates to the financial rules and regulations. You should also ask customers what they want from their condos to keep in tune with their needs.
You should also play a part in your condominiums' associations. Be a proactive voice, one that tries to solve problems rather than creates then, and learns what needs doing to each complex and look at how money is saved and invested in the place.
A good tip is to attend a meeting, read a book, and industry publication once a month. Meeting others in the industry can help build your contacts and learn some new tips and tricks. You could also take online real estate courses to improve your knowledge and skills. Most are inexpensive and any effort you make will provide a long-term reward.
5. Screen Tenants Rigorously
The weak point in any renting scheme is the tenant. So, it totally acceptable to perform a thorough vetting process on people who will live in your condos. The best tenants are those in regular employment, with no obvious financial difficulties and who appear to understand the rules of condo life.
As long as you don't violate any discrimination laws, then having a deep screening process will save you from trouble in the future and maximize your income.
The key points when it comes to finding the best type of tenants can be checked out by getting them to fill in a standard form.
On it, you should ask about:
- Their past renting history
- Professional history with references
- Educational record
- A credit check
- Checklist: car owner/smoker/access requirements/pets etc.
Ensure you check any references and weed out people who move very regularly or change jobs often. Also be prepared to see what online footprint they have, many people's social media accounts would highlight them as highly undesirable tenants.
Finally, check with them that they understand any renting agreements and condo by-laws, in person.
By following these guidelines and tasks with each property and potential renter, you will get to know your ideal renter, and ultimately improve how you run your condo business.