Property owners’ responsibilities are multifold, but an essential one is keeping the rental units they own and manage fully habitable for their residents. When tenants are happy because they live in a great unit, they’re more likely to take good care of the space and renew their lease. In turn, these factors also make for happy property owners.
But this job comes at a cost – and those costs are rising. Annual operating costs for rental properties consume the largest portion of any owner’s budget. The good news is there are ways to control these expenses.
Tips for Managing Operating Costs on Your Rental Units
- Scrupulously track your expense data – Dig into the numbers to see where your greatest expenses are occurring – and then use that information to make better decisions going forward.
For example, the data we track at RL Property Management shows that the maintenance category dominates our expenses. Knowing this informs our overall management philosophy and how we approach repairs and maintenance. Because labor costs generally account for the majority of our expenses related to a repair, we choose to invest in higher quality materials so the item will last longer and thus reduce our expenses over time. This leads to our second suggestion on controlling costs…
- Invest in high-quality equipment – We know that certain repairs are going to cost more than others, so why not extend the life of those items that will really benefit from being a quality product, like water heaters and HVAC units? Purchasing better quality items means fewer breakdowns and repair expenses, plus there will likely be savings on energy expenses to boot.
- Lease to good tenants – Sourcing quality tenants is important to reducing the number of issues (and expenses) you may encounter related to a given unit. We recommend screening potential tenants by evaluating these “Big Five” areas: credit history, criminal history, eviction history, rental history, and income.
- Hire a professional property management company – Experienced professionals who know the market and industry best practices are best positioned to help you use your budget most effectively. Many will also manage and run reports for you, which you can then draw on as you make ownership decisions going forward.
Operating costs are an inevitable part of owning rental property, but there are ways to keep them low while still offering high quality units to your renters. For questions or help with your property management needs in Franklin County, Ohio, contact us at RL Property Management.
