New Year Property Management Checklist: Goal Setting for Landlords

Everyone’s always excited when a new year’s coming, and for landlords, a new year is the perfect opportunity for you to take a step back from the hustle and bustle of managing your rental properties and actually decide what you want to accomplish. For this reason, you can use last year’s numbers to pinpoint where your properties performed well, where you lost money, and which changes need your undivided attention. This article takes you through how you can review your past performance and gives you a solid ground to figure out your next steps.

Reviewing Last Year's Rental Performance

Occupancy

For starters, when you’re reviewing your rental’s performance, take a look at how consistently your units were occupied throughout the previous year. For instance, you can review how many days each property stayed vacant between tenants and spot the period that vacancies lasted the longest. Bay Property Management Group Philadelphia often starts the year by reviewing occupancy and turnover data before setting new goals.

Another thing you can do is compare your occupancy figures across your properties if you happen to own more than one rental. Once you do this, you might figure out that one of your units stays vacant longer because of its price, condition, location, or marketing, giving you a specific issue to address in the following year.

Expenses

The next thing to do is review your property-related expenses from the past year, and then separate your predictable costs from the unexpected ones. To that end, you should look at things like repairs, maintenance, utilities, and any other recurring expenses, so you can tell exactly what your budget’s going into. After that, compare what you expected to spend with what you actually paid. For example, repeated repair bills for the same system could indicate that replacing the thing makes more sense than continuing to patch it.

Turnover

When you’re dealing with turnover, examine how often your properties turned over and what each turnover cost you. For instance, include services like cleaning, repairs, advertising, administrative work, and rental income lost while a unit was empty.

Furthermore, another useful step is to take note of why your tenants left instead of treating every vacancy as the same problem. Yes, turnover is a normal part of renting, but the reasons behind it can show you what you should change in your management to make a meaningful difference.

Setting Measurable Goals for Rent Growth & Retention

Establishing a Realistic Rent Growth Target

As the new year approaches, one of the things you should do is set a rent-growth target. Now you should base this on your property's current market position instead of just choosing a random ambitious number. Basically, your target should fit both the rental market and what your property can reasonably handle.

For example, small changes, like adjusting rent timing or reducing vacancy days, are simple ways to boost profits with rental income year over year. In addition, you should still consider when you want changes to start happening and how you’ll communicate them to existing tenants.

Building a Tenant Retention Strategy

The next thing is figuring out a tenant retention plan for the new year, whether that means increasing your renewal rate, reducing avoidable turnover, or just improving communication before their leases expire. In the same vein, you can track renewal decisions and the reasons your tenants leave so your goal reflects actual patterns instead of assumptions. Create a renewal process that begins well before each lease ends. Regardless, you should definitely write each target down with a deadline so you can review your progress consistently.

Planning Capital Improvements and Budget for the Year Ahead

Prioritizing High-Value Property Improvements

When preparing your budget for the coming year, identify any improvements that can increase the value of your property. However, you need to review each of your rental units individually, because an upgrade that makes sense for one unit may not provide the same value in another. All the same, you should consider improvements that affect how easily you can attract and retain tenants.

Creating a Practical Annual Property Budget

Finally, turn your goals into a budget with specific amounts for routine expenses, planned improvements, and a reserve for unexpected costs. Better still, you can give each of your goals a financial limit so you can decide which projects can happen now and which need to wait until later. When it’s possible, break your larger projects into stages so you can manage your cash flow without putting off necessary work indefinitely. In addition, revisit your budget during the year rather than treating it as a document you create once and forget. Even though your original plan gives you direction, you should still adjust your spending priorities if maintenance costs rise or your rental income changes.

Conclusion

When you’re able to set effective goals, you’ll have a more solid direction and be able to manage your rental properties better throughout the new year. That's why reviewing your occupancy, expenses, and turnover first is a great way to create realistic targets for rent growth, retention, improvements, and spending. Yes, your original plan may need to change as the year progresses, but having measurable goals gives you something concrete to work toward and review.