Every landlord should determine what their rental strategy is. There is no right or wrong strategy, but you need to have one! The core of the rental business is to maximize rent while decreasing costs.
One of the biggest costs of being a landlord as tenant changeover. Any tenant change over generally costs three months worth of rent:
- One month's lost rent while vacant
- One month's rent for all the fees to re-rent
- One month's rent for all the misc repairs, touchups, cleaning etc done even at a good tenant's turn over.
I have two different strategies I use that have evolved with experience.
Spend the Minimum:
When I could barely afford to pay the mortgage, I spent the minimum on repairs and upgrades, put less-qualified tenants in who actually paid higher rents (cause no one else would rent to them) but who moved out more frequently and caused more problems. But this paid the mortgage and allowed me to save money to build a portfolio.
What makes your property stand out from the other homes a potential tenant may be considering? Nowadays I renovate my homes giving a property an emotional quality. I renovate with highly durable, good quality products. Offer a tenant a home that is better quality than they expect at a competitive rental price and you will have great quality, long term tenants that cause no fuss, recommend you to others, and never want to move! I spend a fraction of the time I used to and enjoy a greater surety of income with this current strategy. However, the net financial result is similar with either strategy!