Rent growth is important to landlords as it directly impacts their income and property’s value. Increasing rents can lead to higher profits, improved property appreciation, and a better return on investment, making it a key factor in a landlord’s financial success.
But how can landlords increase rents and renewal rates? We invited Mr. Tan Su, the head of the Ark7 operations team, to share how Ark7 uses professional expertise and standard processes to optimize rental income & operation efficiency. Below is the summary of Ark7 property management experience.
In the first half of 2023 Ark7’s property management team successfully renewed 70% lease agreements, with a high overall tenant satisfaction rate. Among them, 71% tenants proactively contacted Ark7 to request lease renewals. All new leases have a 12-month term, and the average rent has increased by nearly 6%!
Pre-Screening Tenants
Ensuring the efficiency of property management starts with a fundamental step: tenant selection. Sometimes, it’s essential to wait a bit longer to find the right tenant to avoid unnecessary future troubles. The Ark7 team takes a thorough approach to assess each applicant. In addition to conducting background checks and evaluating credit scores, we also consider rental history and assessments from previous landlords to make a comprehensive judgment when selecting tenants.
Maintaining Relations with Tenants
Reasonable repair and maintenance requests from tenants should be promptly addressed. Ark7 launched the Renter APP in early 2020, which centrally manages tenant information, leasing processes, rent payments, routine maintenance, and timely communication. Tenants truly enjoy high-quality service, well-maintained properties, comfortable living conditions, and are willing to stay for the long term. This greatly reduces the vacancy losses and additional leasing costs caused by tenant turnover.
Additionally, Ark7 typically inquires about the tenant’s intention to renew the lease two months before the contract expires. Subsequently, a written renewal contract is issued, allowing both parties time to coordinate lease extensions, pricing, or termination matters.
Setting Reasonable Rents Based on Market Data
The pricing for new leases is determined through competitive analysis. For instance, for a 3-bedroom, 2-bathroom, 1,500 square foot property, we would examine data from approximately 5-10 rental listings currently available on the market that are in close proximity, have a similar floor plan, and are of a comparable size. We calculate the average rental price per square foot from these listings and then multiply it by the square footage of our property to estimate the current approximate market price. The team then further adjusts the pricing for new leases based on individual property strategies and tenant information.
Renovating Your Property Strategically
If budget constraints are a concern, consider prioritizing upgrades to the kitchen and bathroom areas. A clean, functional, and durable kitchen, along with a bright and clean bathroom, can add the most significant value to your rental property. Select wall and floor materials that are easy to maintain and have a long lifespan, taking into consideration local climate conditions and tenant living habits.
Additionally, you can consider replacing kitchen countertops and cabinet doors, upgrading appliances as needed, or replacing cabinet handles and faucets to enhance the overall appeal of the kitchen and bathroom. These improvements can significantly boost the attractiveness of your property.
In 2022, we conducted a renovation of a 5-unit multifamily in Berkeley, California, completing the project within two months. After relisting the property, we saw a 15% increase in rent, showcasing the positive impact of strategic upgrades.
About Ark7
Ark7 is a fractional real estate investment platform founded in 2019. It enables both accredited and non-accredited investors to participate in real estate investments starting from as low as $20. Ark7’s core mission is to democratize real estate investment, making it accessible to everyone. It provides flexible investment opportunities, empowering investors to acquire, retain, and trade fractional shares in high-quality rental properties across the United States.
As of today, Ark7 boasts nearly 40,000 registered users and has invested in 20 properties across 8 states, with total assets under management reaching $16 million. Notably, Ark7 distributes dividends on a monthly basis, and the cumulative dividend payments have now surpassed $1.65 million.
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