One of the best way for investors to increase the profits they earn on their rental properties is by reducing the costs associated with that property. There are a few things you can do to keep your expenses low and your returns high.
Save on Utility Costs for Your Property
The utility costs that are incurred on your property can be a huge expense for owners, especially if you have a large building with multiple units. If you do have a multi-family property, some cities allow for the set up of a ratio utility billing system. That helps you pass the cost of water, sewer, and trash onto incoming tenants. Over time, this becomes a huge savings point for landlords. We work with a property owner who has 270 apartment units. With this system of tenants paying for the cost of their utilities, the owner saves a lot of money every month and protects the value of his investment. Call us to check if the area your rental is located in will allow for this.
Make Common Sense Improvements
When landlords think of building improvements, they imagine large financial costs that require years of reserves or a huge investment. However, you need to remember that improving your building is a good way to increase its value, and attract the highest quality tenants. Then, you can charge higher rents, even in a rent-controlled environment. The additional rent will offset the costs of the improvements. Did you know that often, you can charge your tenants 50 percent of your capital improvements, even in rent-controlled buildings? We do this for many of our owners at no additional charge. Call us to learn details. This may allow you to substantially upgrade your property, and recoup entirely half of the cost.
Be Proactive with Maintenance and Repairs
You need to have a reliable list of professional vendors who can do high quality work quickly. All of the people you work with should be licensed, insured, and bonded. You don’t want to work with any contractors or vendors who charge outrageous prices and cause delays. This will only put your property in jeopardy and make your tenants angry when repairs aren’t being completed in a timely manner. When you develop good relationships with maintenance companies, you save money. You can also be sure your property is in qualified, responsible hands. At LAPMG, we have an in-house maintenance team which helps us to reduce repair costs significantly, and to make repairs fast.
These are three essential ways to contain costs and keep your profits high. If you have any questions, please contact us at Los Angeles Property Management Group.