Owning real estate property requires ongoing investments in order to fuel its everyday operations. Unlike the stock market, you have to regularly spend money in order to reap profitable rewards.
But even with ongoing operational expenses, there are still ways to significantly increase your profits and your property’s overall value (a.k.a., its net operating income, or NOI). Operational expenses and NOI have an inverse relationship – when one goes down, the other should go up.
How to Make Repeatable and Sustainable Operational Decisions that Impact NOI
When it comes to analyzing operational expenses, there is one key area to zero in on first – and that’s your data. When you know how much you are currently spending on things like energy costs, you can then take steps to reduce them.
It’s no surprise that operating costs consume a large portion of your monthly expense budget, and they’re likely to only go up, especially if you do nothing. Rising energy costs and inflation make managing the day-to-day necessities of property ownership in Franklin County challenging.
To control your spending while still offering a quality product to tenants, you must track your expenses diligently and evaluate that data regularly. Knowing where your greatest expenses are occurring can help you make better decisions going forward, and those decisions can have a big impact on a property’s overall net operating income.
Moreover, you must also be mindful of maintenance expenses. Repairs and upgrades are necessary, but they can take a bite out of your operational budget. Consider a strategic approach to streamline maintenance and repairs so you can and optimize the way you spend and save on items in this category.
Consider Hiring a Property Management Company to Reduce Operational Expenses
Lastly, it’s worth considering the ways in which a professional property management company can help you increase NOI and decrease operational expenses. Hiring experienced professionals who know the market and industry best practices is one of the easiest steps you can take to save money and time. Many, like ours at RL Property Management in Columbus, will also manage and run reports for you, which you can then draw on as you make ownership decisions going forward.
To learn more about owning rental property in Central Ohio, get in touch with us at RL Property Management. Our team manages around 600 units in the greater Franklin County area, and we have the expertise and professionalism to help you get the most out of your strategic investment.