Three Key Investment Real Estate Metrics You Must Track for Success
Keeping on top of your real estate investments is critical to them reaching their peak performance. Just like your car where it’s important to monitor your oil and gas levels, there are three keys metrics you need to monitor so your real estate investment’s run at peak performance. If any of these three key metrics are neglected, your investment’s performance could run out of gas.
Three key investment real estate metrics you must track for success:
- Occupancy – Tenant turnover is a major challenge in multifamily investments. Occupancy will change monthly or even daily. If you don’t keep your properties full, they will not produce the income you want. You must keep on top of your property’s occupancy rates and continually bring in quality prospects to replace those that leave or fail to pay their rent on time.
- Collections – Not only do you need to keep your properties full physically, but it’s essential that you collect all the rent and late fees owed each and every month. Your economic occupancy is even more important than your physical occupancy. This might seem like a “no brainer”, but depending on the property, it can be more difficult than it looks. A property can be full, but it won’t matter when it comes to your financial statement unless each tenant that lives in the property is paying their rent each and every month. The majority of profits earned are determined on any investment property in the final 10-15% of the rents collected each and every month. Don’t leave your profits on the table by not collecting everything that is owed. It’s essential to have a manager that collects rent, late fees, and any other income judiciously.
- Maintenance – Keeping up on maintenance is essential. A well maintained property will have lower repair costs and lower tenant turnover which is what you want. You also protect your investment when you keep your property in good shape by not allowing disrepair spiral out of control. A well maintained property will result in peak values for your property. Poor owners take all the money out of a property and neglect small maintenance items only to have them snowball into major issues. In turn, the value of the property plummets. Smart owners know that if you put money back into your properties and keep up on maintenance, you’ll ensure peak value and consistent cash flow.
There are three key investment real estate metrics you must keep track of to keep your real estate investment performing at peak levels. You must maintain high occupancy, stay on top of collections, and keep your property well maintained by taking care of maintenance tasks in a timely manner. If you stay on top of these three key metrics, your investment properties will reward you with happy tenants and a healthy financial statement each and every month.