Property managers found that this year’s taxes, insurance, and maintenance expenses increased. They also noticed downward pressure on rents in Denver because of the supply of newly constructed apartments coming on the market. Maximizing rental income in 2024 without raising rent requires decisions by property management companies to lower expenses, increase revenue, and provide value to their tenants. Here are some ideas to consider:
Cut Operating Costs – Property managers should regularly review and negotiate contracts with service providers to ensure they get the best rates for maintenance, repairs, and other property services.
Add Value – Consider including additional services, like Wi-Fi or attractive landscaping, as part of the rent without increasing the overall cost. Owners save money if they decide to Xeriscape their landscaping. Xeriscapes require less water and care, enhancing a rental home’s curb appeal.
Make Cost-Effective Improvements – Home improvements increase a property’s appeal by updating fixtures, painting, or adding modern touches. Choose premium-grade materials for improvements to ensure longevity. Do not buy cheap paint. Instead, purchase premium-grade paint because it lasts longer. Appliance quality is not as good as it used to be, so property managers should suggest their owners buy higher-end appliances that last longer. Also, upgrading to energy-efficient appliances can save on utility costs in the long term. The same holds for window coverings.
No Carpet – Most home rentals do not have carpet for good reason—carpet is expensive to install and maintain. No matter how careful tenants are, carpets get stained and are challenging to clean. Also, the carpet wears out faster than it used to. Most older homes have natural wood floors. Tear out the carpet and use these floors instead. If no hardwood floors exist, install modern flooring using long-lasting natural wood, vinyl, engineered, or wood-like materials.
No Ice Makers – Ice makers break a lot and can cause water damage. When replacing a refrigerator, get one that does not have an ice maker. It will save both the property manager and owner money down the road.
Charge for Extra Services – Look for opportunities to charge more for extra services. Some properties have extra parking spaces. Charge tenants a monthly fee to park an extra car, boat, or RV on the rental property. If a shed is in the backyard, charge tenants to use it for storage.
New Construction Replacement – Home rental investors should try to buy new construction. The systems in homes built in the 1970s and 1980s are starting to wear out and break down. New construction usually has zero maintenance costs, benefiting rental cash flow.
Renters Insurance – Experienced property managers require renters to buy renters insurance. Renters insurance is low cost and protects the property from tenant negligence causing flooding, fires, theft, vandalism, and other damages. Renting to uninsured tenants exposes property management companies and their owners to financial exposure.
Regular Maintenance and Inspections – DenCO Property Management (DenCO) strongly believes in bi-annual inspections. Inspecting rentals twice yearly identifies potential problems early, preventing more significant and costly repairs. We arrange with their bench of professional service companies to make repairs on a need basis.
Avoid Vacancy Time – The rental market in Denver is softening, so when a tenant moves out, the chance of vacancy increases. Property managers must implement marketing to attract tenants immediately when a vacancy occurs. Also, getting renewals from existing renters is a must. They need to proactively take care of their tenants so that they stay put when it is time to renew. Click here to read more about the current Denver rental market in our latest blog, “What Do You Do If You Cannot Sell Your House in Denver?“
In soft rental markets, owners should consider professional property management companies like DenCO to maintain rental income and lower vacancies. Hiring us lowers rental risks. We manage 150 rentals in the DU, Washington Park, and other Denver neighborhoods and have been in business since 1999. Call us at 303-722-9688 or click here to complete a Contact Us form.
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