If you have a business that involves residential property, then one of the main tasks in your business is to determine how your properties are doing and how they are performing. The industry is extremely volatile which means that landlords and property managers can’t afford to let things slide as this can result in many issues down the road.
There are a lot of metrics involved with property, and if you are looking to start in property, these are the key to your success, understand them thoroughly and you will find that property isn’t as confusing as it sometimes seems. You should understand your key performance indicators as they are used to monitor a property portfolio. In this article, we will go through some of the key metrics that landlords and property managers should be aware of tracking regularly.
One of the main things that you are going to be tracking is the revenue that your properties are bringing. This is different from monitoring your profits and losses and this is monitoring the overall yield. This is important for the overall year-on-year monitoring as it helps you to understand what areas you are doing well in and then where you are not. This helps to show where you need to put more focus on in the coming year and what areas are happy to carry on as they are, so it pays to be a little critical and analytical in this area. Once you have year-on-year data, a revenue forecast sheet and report should be created so that you know how much to expect through various parts of the year which allows you to plan for the future.
Repairs and maintenance
Properties are always needing some sort of repair or maintenance work before renting your property out as well as when the property is already tenanted. More often than not it can be expensive if you have to get a professional out to do the work, so it pays to be handy with the tools. When you are a landlord, you realise all the costs involved with property maintenance. It is slightly unrealistic that you will have the time to contact all different contractors and find the best price as well as quality assurance. But in truth, if you have ever used a contractor for any work and are happy with it, then add them to a list of contractors you trust. It is always best to keep a list of trusted contractors and tradespeople that you can keep long-term.
Properties are expensive and with interest rates increasing and also the recession it is becoming harder to make a profit when it comes to buy-to-let properties. The last thing you want to be doing is selling yourself short, or charging too much for the property. There really is a delicate line between this as it can be a matter of being fair and then charging too much which will leave your existing tenants leaving the property for something more affordable. If you charge too much, you could face tenants being in arrears and this then ruins your cash flow for the year ahead. If this does happen, having landlord legal advice is the best way to go. You can check how much you should be charging by looking at other properties around your area that are comparable to that of your property as this will then show whether you need to charge more or stay the same.
To be successful as a landlord or property manager, there are key metrics that you should be monitored regularly in order to make a profit. These metrics are essential as they will in turn help you to make more informed decisions about renovating, and growing your portfolio.