The profitability of a rental property or portfolio hinges on achieving optimal rental rates coupled with quality execution. Subtle improvements can lead to significant returns. Conversely, minor lapses in execution can often eliminate any profitability. Crestmont developed the 3-2-1 Value Strategy™ to ensure our clients achieve the maximum income and value for their rental or investment property.
Our 3-2-1 Value Strategy™ is built on the fact that incremental improvements across key metrics often produce a disproportionate return (i.e. “Subtle Improvements Unlock Significant Returns”). Many of our clients have experienced rental rate increases much higher than 3% depending on their property and specific local market conditions such as this client story.
The most common way to measure and compare maintenance costs is as a percentage of rent. The industry average spent on maintenance is 4-5% of annual gross rent. Properties less than 5 years likely require roughly 2% versus properties over 10 years old usually require 6-10% depending on actual year built and major renovations.
If you have ample free time and an appetite to stay up with ever-changing rental laws, then you might be a good candidate to manage your own property. Placing a realistic value of your time is a key element to the overall analysis. Sufficient free time, obtaining market rental rates or higher, leasing faster than market averages, and maintaining a reliable/competitive network of vendors to control quality and costs is the formula to optimized returns and valuation.
The reasons to hire a property manager versus self-manage your property vary as you might expect. Some of the more common reasons owners & investors hire a property manager include:
The value of a rental property is ultimately determined by how much operating income the asset can produce. The combination of rental rates and vacancy rates dictate how much revenue your property or investment can generate. Maintenance is the primary controllable cost for an investment property versus taxes, utilities, etc. The 3-2-1 Value Strategy™ is intended to maximize revenue while minimizing controllable cost resulting in the highest operating income (NOI) possible.
Any effort to unlock the full potential of your property begins with ensuring you achieve competitive market rental rates. Understanding how your specific property impacts potential rental rates coupled with accurate, relevant comparables of what other properties in your neighborhood rent for is a great starting point. Request a complimentary Crestmont Rental Rate Analysis coupled with our exclusive Rental Market Report to determine the right rental rate for your property.
The 3-2-1 Value Strategy™ is specifically designed to help owners & investors maximize their returns for long-term, unfurnished condo, townhome, and single-family properties. The 3-2-1 strategy™ is a byproduct of 15+ years of experience refining our processes to target the operations & improvements that unlock the fuill potential of a property.