Owner rental philosophies: pricing, tenant quality, occupancy, cash flow
Have you ever wondered why certain storefronts and apartments etc seem to stay empty for longer than similar ones, which could be owned by different owners / owners? Different owners seem to have different philosophies, perspectives, and points of view, when it comes to key components, including: pricing; quality of tenure; occupancy rates; and general cash flow needs and priorities. Although there is no rigid way to manage a particular property, this article will briefly attempt to consider, examine, review, and discuss some of the options / approaches, including trade-offs, and other considerations.
1. Prices: Whenever a property, whether residential or commercial, is available / vacant, the specific owner has to make many decisions about the best way to proceed. Perhaps one of the key considerations is price. It seems that many homeowners, especially those who own commercial buildings / storefronts, decide to ask for as high a price as they think they can. Because of this, we often witness bigger turnovers in some places than others. What is often confusing is why they don’t realize, or don’t seem to care, that every month it remains vacant, which means it takes many months or more to make up for that loss of rental income. Some believe that it is important to proceed in this way, because it will set the level of future rents, and although this may be true, it will only be true if they do not constantly experience turnover and prolonged vacancy! This is even more true when it comes to residential properties. My wife and I own multiple residential units and are pleased to have some of the lowest vacancy and turnover rates. We prefer to price these units, more conservatively and lower, and maintain high-quality, reliable tenants!
two. Tenant quality: One of the most expensive parts of owning a real estate property is finding a new tenant every time we need to. Doing so often requires additional fees, marketing expenses, maintenance / repairs / renovations, and time / hassle. If you find trustworthy tenants, doesn’t it make sense to try to find common ground and a meeting of minds to maintain them?
3. Occupation: Those who maximize their occupancy rates often enjoy much less stress and hassle. Careful consideration of the above two factors is an important factor, in your best interest!
Four. Cash flow: Owning an income property produces the least amount of stress, strain and hassle, and generally the best results, when there is the best possible approach to maintaining the necessary cash flow, to cover monthly expenses, etc.
Owning could be extremely profitable or a nightmare. Focus on the big picture, don’t be greedy, value quality tenants, etc., and you’ll maximize your chances in the long run.