Rental income refers to the sum of money which is collected by a landlord from a tenant or a group of tenants for renting a particular space. In simpler words, it is the income received from rental properties. As a Landlord you would like to get as much rent from your property as you can and put as much of the rental income in your pocket a possible. Standing in your way of keeping rental income are rising operating costs for just about everything, sometimes controllable and sometimes not.
Repairs are one of those expenses where you have some control, and can be broken down into two categories; those which are required such as heating, and those which are not required such as paint. As a Landlord you may incur an expense when repairing a heating unit, which is required of you. In this situation you can control expenses by closely monitoring charges for service. Comparative bids can be obtained to insure your getting the most bang for your buck and not overpaying.
There are other expenses that are not required but may be good decisions, such as new paint. In deciding whether or not to spend money on making cosmetic repairs like painting you should ask the following two questions; first, can I increase rent by making the repair? Second, what is my recapture period or simply put, how long will it take to get back the money spent? Recapture period is determined by dividing the cost of the improvement by the increased rental amount. For example, if the cost to paint is $1,000 and you can get an additional $50 rent per month due to the new paint it would take 20 months to recapture or get back the $1,000 spent on the paint expense. Recapture periods of 40 months or less is indicative of a good investment and justifies the voluntary expense.
Increasing rental value through property improvements gets you closer to maximum rental income, yet there are other factors that play into this as well. Customer care and maintenance responsiveness are also big factors in the value perceived by residents. Is the Landlord timely in making repairs, are they responsive to my requests? Being prepared with vendors that can quickly respond to service calls will limit the time a resident spends with a problem and limit any negative feelings. Quick responsiveness to a problem shows residents you care about them and creates good will, and this in turn increases rental value.
Fortunately there are professional Property Management Services in Phoenix prepared to handle all aspects of operations. A premier company in the field of Professional Property Management is Valley Income Properties (www.valleyincome.com) based in Phoenix providing full service property management. Services include handling all daily supervision, maintenance and communication needs. From painting to plumbing, vacant apartment turnovers to leasing and setting market rental rates, all your management needs are covered. According to Mike Calkins, V.P. and Chief Operations Officer at Valley Income Properties We provide property owners our expertise in evaluating the maximum value potential for their property, and what it will take to get maximum revenue. According to Mr. Calkins you need to be cautious not to overspend when making property improvements. Some owners throw money at their property and expect to get back their investment, what we know is there is a limit to what the value potential is, and thus a limit to what should be spent. We help our clients determine what that amount is.
Valley Income Properties deals in all kinds of property management services: Property Inspection Reports, Full Service Property Maintenance, Distressed Property Rehabilitation, Bank Receivership Services, Tax, Insurance and Utility Cost Analysis, As-Is vs. As-Stabilized Budget Analysis and is committed to give maximum returns through its management structure.