Is your Salt Lake City rental property a business or a charity?

Is your Salt Lake City rental property a business or a charity?

Real Estate Services - Property management team addressing an issue

How to treat your Salt Lake City rental property like a business

How would you respond if someone asked if your Salt Lake City rental property was a business? I’m guessing you would obviously answer yes. What about if they asked if you’ve ever had a tenant who’s fallen behind on rent? If you’re like most Utah landlords, you will also answer yes to this question. Here’s the problem: If you have a tenant who’s behind on rent, you aren’t running a business – you are running a charity!

We all like to think of ourselves as “having a heart”, but in the property management business, excess generosity is a sure path to bankruptcy. Did you know that if your tenant falls even one month behind, there is about a 65% chance that they will never catch back up? Does that change your perspective about being strict with your residents? It should. In fact, a reluctance to be the “bad guy” is the number one reason why most DIY landlords eventually hire a Salt Lake City property management company to care for their rental. A professional manager won’t be afraid to do what’s necessary to help your tenants pay on time.

Contrary to what you may believe, the best way to encourage your residents to pay on time is to hold them accountable when they don’t. If they pay late, then charge them a late fee – DO NOT waive it. Surprised? Think about the message that waiving that fee sends. If there were no penalty for paying your mortgage late, would you ever pay it on time? If you could show up to work whenever you wanted, would you be there first thing in the morning? Of course not, but we all do things we don’t want to do because they are required of us, and more importantly, because there are consequences if we don’t. Make sure that your tenants know that paying on time is a requirement.

 

If you’d like more tips on how to avoid turning your Salt Lake City Rental property into a charity, then contact us today.

The importance of reinvesting in your Salt Lake City rental property

The importance of reinvesting in your Salt Lake City rental property

Salt Lake City, Utah Property Management - Beautiful Rental Property with pristine yard for rent

Reinvesting in your Salt Lake City Rental Property | Why it’s important

Being a Salt Lake City rental property owner isn’t easy. As landlords, we like to think that our properties are “good enough” and don’t need ongoing maintenance to keep them occupied. The fact of the matter is that every rental will begin to show signs of major wear and tear after a couple of residents. Traffic stains will start to appear on that new carpet, those freshly painted walls will begin showing scuffs and scratches and those “brand new” appliances become “old” much faster than we’d like. Unfortunately, prospective tenants will quickly notice and the desirability (read: profit) of your Utah rental unit will dwindle with each passing year. That is, unless you reinvest in your property.

Now it isn’t feasible to complete a total remodel after each resident, but earmarking a few dollars and planning to refresh the unit every few years is a great way to protect your investment. If weeds are taking over your yard – add fresh bark and plant a few flowers. If the blinds are damaged and hanging by a thread – replace them with new ones. You’ll find that keeping your property in great condition will help if lease quickly and stay rented. The income you’ll receive from reducing your vacancy rate and keeping your monthly rents near the top of the market should outweigh any additional maintenance expenses.

Furthermore, it’s easy to forget the oldest rule in investment real estate – your property’s value is directly tied to the income stream it produces. If you can spend a few thousand dollars updating your unit and increase the rent by a hundred dollars or more, then you have not only improved your monthly cash flow, but have increased the overall value of your Utah rental property.

 

Please contact us today if you’d like to discuss other ways to maximize the value of your Salt Lake City rental property.