5 Rental Property Problems to Solve For Big Profits

“Opportunities are never lost. The other fellow takes those you miss.” – Anonymous

Often, finding or creating great real estate deals is nothing more than figuring out what the problem is and fixing it. Here are five of the most common real estate problems, and some ideas for solving them:

1. Landlord Burn Out

Being a landlord can be stressful and tiring. Picking just one bad tenant can make your life miserable. And, if you don’t have a clear set of goals or an easy to follow strategy, it’s often easier to call it quits.

A frazzled and frustrated landlord is done dealing with the troubles of their property. All you need to do is find them, and offer them an easy solution to their issues. Most of the time this person will think the only way out is to sell. But, in today’s troubled market they may lose money on that sale. Their real problem is dealing with the bad tenants… if it’s otherwise a good property, you could offer to become a partner on the deal. Maybe you get a 20{13624d55b67f4b161de617d2e9d293368a3a357ee2b9d3c0f7245ef1c05927df} share of the property for just taking on the role of property manager? No money invested on your part, just some time, sweat and trouble to get rid of the terrible tenants, place some new ones and take the odd call.

2. Highest and Best Use

Most investors just look at a property for what it is . . . but you can look at what it COULD be. In cities where the vacancy rate is low, the City is often anxious to add more units to the rental pool so approvals for changes should come easier. Find a house with a basement that could easily be turned into a suite. Or, if you’re more ambitious, find a house that could be lifted, extended or torn down and turned into a multi-unit property. This takes work, tenacity and an understanding of city planning (and permits), but the payouts can be big, especially if you’ve got handy friends and family or just a good relationship with a few contractors.

3. Find Properties that Need Love

With the number of foreclosures on the rise, and more and more distressed sellers, now is the time to find properties that need love. You want to find the ones that just need cosmetic love though – the ones with lots of internal problems will be expensive and time consuming to fix. Look for properties where the lawn has been overtaken by 2 foot high weeds, newspapers are piling up, and the lights are never on. These properties may be close to foreclosure or just have an absentee landlord that thinks there is no market to sell.

4. Be a Better Property Manager

Lower costs and increase revenues on the properties you own. Energy efficient light bulbs, low flush toilets and ensuring windows and doors seal properly are all things you can do to be kind to the environment while reducing your property expenses at the same time. Or, if your tenant pays the bills, it’s an additional selling point and can help you retain tenants longer at the highest rent possible in your market.

To increase revenues, you can charge for parking, rent out your garage separately, rent out a storage locker separately, and charge for laundry services.

5. Be a Better Marketer

Nearly everything you do in real estate involves sales and marketing. You can make better deals by being a good negotiator. You can find better tenants and get higher rents by understanding marketing. When you find a deal and negotiate it, you will be using your best selling skills. When you write ads to attract tenants you will be using your best marketing talents. The key to all of this is to focus on the other person. Figure out what the problem is of the person you are negotiating with, and be the solution. Determine who your ideal tenant would be and write an ad that appeals to that type of person.

Of course there are plenty of other ways to make money with rental properties, but most of these problems can be solved pretty easily – you just have to know what to look for and present yourself or your deal as the solution!