What are your goals?

Your goals and time frame are going to play a huge role in when you should expand your property portfolio. If you want to achieve financial freedom in the near future then you should start expanding your property portfolio right away. But if you have a longer time frame of 10 or 20 years then obviously you don’t need to expand your portfolio as quickly.

Your goals and how long you want to take to get there is going to largely determine when you want to expand your portfolio and how much risk you want to take.

What is your risk appetite?

Thinking about your risk appetite is an important step in your investment journey. You’d have to consider how risk-averse you are and factor that into your overall decision.

Your risk profile will affect when you expand your portfolio because you may be more risk averse or at a point in your life where you can’t afford to take risk. That then is going to effect when you choose to expand your portfolio because you may not want your loan to value ratio to blow out of control.

Can you afford to finance a new property?

It may seem self-explanatory, but it’s good to consider if you even have enough of a positive cash flow to finance the purchase of a new property. If not, where can you get the funds from? Can you partner up with someone in a joint venture or borrow the money from close family and friends that you trust?

Will banks be willing to lend to you?

If your cash flow is in a good place, it’s time to start considering your borrowing power. Start working on your credit if it’s not good enough and begin to build a strong case for borrowing to finance the remaining amounts of your next purchase.

What is your exit strategy if there is a market downturn?

If you are investing in a positive cash flow property that produces income then chances are you can probably bide your time if the property market goes down.

But if you are hoping for an increase in the market because you want to sell your property in one or two years then that could put you in a difficult situation where you may not be able to afford your property and it’s losing you money.

Setting the right price for your rental property can be a bit confusing. Read our previous blog post: Pricing Your Rental Correctly

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Here’s our guide on how to price your rental correctly.

Look at your local market

Before pricing your rental, it’s important to have a thorough look into what other landlords locally are charging. 

The average price can vary greatly, depending on states and cities. As an example, rental properties are likely to be at a premium in places like L.A and New York City, whereas smaller towns with less economic growth and higher paying job opportunities, maybe less desirable to prospective tenants which pushes down the price.

Consider the seasons, they matter

In addition to looking at local competitors, considering the seasons is also a very important factor. Seasons are important as they tend to reflect demand for rentals in your designated area. As an example, if you’re based in a neighborhood that is mostly made up of homes for sale, then this can give you more room to upcharge your rent due to limited options for tenants. However, if your property is heavily surrounded by rental properties, you’ll need to set a more competitive rent price to avoid being overlooked by good tenants. 

Consider your property amenities

Make sure you showcase your most favorable amenities within your rental listing and factor them into pricing your rental.

For example, if you find a comparable property that’s similar in size to yours but it lacks an important feature or amenity, such as a parking space, then you may be able to justify a higher price.

Are you constantly burning out because of stress and running your rental business? Read our previous blog post: Keeping work-life balance as a landlord

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Focus on productivity and output

Someone can only really achieve a healthy work-life balance if they feel a sense of accomplishment in both spaces. This is where productivity comes into play. Focussing on output and productivity may mean that you carve out certain times of the day to work and rental property-related management tasks. Alternatively, during specific hours of your day, you only worry about property or tenant concerns. You’ll find within those dedicated parameters set for yourself; you can be more productive.

Establish clear boundaries with tenants

If you live in or close to your rental property, it’s going to be hard to get away from constant tenant requests. In these cases, it’s very important to create some distance and to communicate your availability clearly.

It’s worth mentioning, too, to avoid becoming too friendly with your tenants. But blurring the lines of professionalism can create an unhealthy relationship. If your tenants feel like you’re their friend and not their landlord, they will be more likely to overstep their welcome with you with calls and requests. The idea is to create a comfortable distance where you’re still connected to the renters without compromising your home or personal time and space.

Invest in property management tools and software

Another key to finding your ideal work-life balance is by leveraging ways to streamline your efficiencies. If your work takes less time to complete and your tasks are easier to manage, you’ll feel less strapped to your property. You can look at implementing new software for scheduling and payment processing (such as PropHub!).

How can you ensure that you’re communicating well enough with your tenants? Read our previous blog post: Best Ways to Communicate with Tenants

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So, how can you best improve your ability to communicate with your tenants? Here are a few of our tips.

Establish an open-door policy

When leasing the property, it is important to establish communication methods with tenants, letting them know that as a landlord, you can be easily contacted. Whether it’s a question about their lease, a request for a rent payment extension, or an issue with a different part of your facility, tenants should always feel comfortable contacting you.

Having an open-door policy allows tenants to feel valued and appreciated and it ensures that you foster an atmosphere of mutual respect with all of your tenants.

Quickly respond to maintenance requests

We know that being a landlord isn’t easy – and when you’re juggling the dozens of responsibilities property ownership entails, it’s not easy to schedule emergency repairs, or respond to every repair request.

However, a landlord that is unresponsive to service and maintenance requests is one of the primary issues reported by tenants when they’re asked about how they feel about their landlords.

Have different communication options

Different tenants have different communication preferences. Older tenants may prefer to talk to you on the phone, for example – while a younger tenant may prefer to primarily communicate via text message and email.

You should give your tenants a list of different ways to contact you, including a phone number, text messaging number, e-mail, and a full mailing address. Landlords also need to make it clear which communication method you prefer – and when you will answer messages from each form of communication.

Be transparent and honest

It’s important to begin forming a good relationship with a potential tenant from the moment they set foot in your rental property. So, in truth, the process of communication starts when you’re advertising and showing your property.

When putting up advertisements and listings for your property, be honest about its condition and amenities. Make sure that you are truthful about the conditions of your rental property, and that you communicate the expectations you will have for your tenants from the outset. This helps you find the right tenant for your property.

You should also clearly communicate all rules and regulations regarding the lease. This includes expected rent, rent due date, your definition of “wear and tear”, and any late fees or other regulations regarding your property. Make sure the tenant knows what’s expected of them – before they sign the lease. Go through the lease “clause by clause” and explain each aspect of it before your new tenant signs.

Give tenants ample notice

Tenants do not like to be surprised by handymen and contractors, or agents who are showing your property to other prospective tenants. While it is not always legally required to give a tenant advance warning before a viewing, or to alert a tenant about a scheduled repair or service call, it is a good idea to do so.

Have you considered making your home more energy-efficient? Read our previous blog post: How to Make Your Property More Energy-Efficient

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