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How to Maximize ROI at Lease RenewalAsheville, NC, is growing, and the housing market is increasing due to high demand and interest in the area. If you own a rental property in Asheville, now is the time to find ways to increase your property's ROI (return on investment) and not be left behind in this booming rental market. 

Determining Factors of ROI 

With any other business, it is important to focus on ways to quickly recover your initial investment so that you can begin to make a profit on your rental property. Renting out a property that barely breaks even or takes a loss every year is not worth all of the hard work that goes into purchasing a property, marketing, and managing the day-to-day. 

Having a good idea of how to calculate your ROI and understand the cash flow around your rental property is imperative, as it can help you make decisions on what to charge and if/when to invest in other properties to increase your portfolio. 

Some factors to look at when determining your ROI are:

  • Initial investments such as down payment, closing costs, and initial repairs.
  • Operating expenses such as management fees, HOA dues, and maintenance.
  • Insurance premiums and property taxes.
  • Mortgage, interest, fees, etc.
  • Rental income and occupancy rate.

To determine your ROI, you can simply use the formula ROI = Annual Returns / Cost of Investment. Your annual return formula = Rental Income - Operating Expenses. 

By having a grasp on your operating expenses and cost of investment, you can further dial in your rental rates to be competitive in the current market while covering your costs. 

Tips to Increase Your Rental Property ROI

There are many ways to affordably increase your property's ROI while still remaining competitive in the market. Having a good understanding of the rental rates in your market is important. If you overcharge, your turnover rate will likely be higher, causing your ROI to plummet due to vacancies in your property.

Effective tenant screening is also a solid way to increase your ROI. Look for high-quality renters who are looking for longer-term leases. Finding new tenants costs money, cuts your profits, and lowers your ROI.

Hire a Property Manager

One of the best decisions that you can make when you own rental properties is to hire someone to manage the day-to-day of your rental business. Not only does this turn your rental property into truly passive income, but also they can devote their skills to finding tenants and maximizing the ROI on your property. 

A reputable property management firm like Asheville Phoenix Properties may be able to assist you in steering clear of many of the challenges associated with renting out real estate. We act as a go-between for you and your potential tenants, taking care to screen and choose only the best applicants for your rental properties.

We can assist owners and renters by managing every aspect of a rental property, thanks to our more than 20 years of real estate management expertise. Contact us today for more information on how we can increase your rental property’s ROI.