As a real estate investor, your portfolio is a cornerstone of your financial strategy. But what happens when a property isn’t pulling its weight? An investment property underperforming can be a silent drain on your resources and profits. Often, the reasons are subtle—small oversights that accumulate over time, leading to higher vacancies, lower rental rates, and mounting costs. Recognizing that your investment property is underperforming is the first, most critical step toward protecting your asset.
The difference between a thriving rental and a financial burden often lies in proactive management and adherence to proven industry standards. Before you consider selling, take the time to conduct a thorough review. This 10-point self-assessment, guided by universal principles of property management, will help you diagnose why your investment property is underperforming and unlock its true potential.
Investment Property Underperforming?
The Ultimate 10-Point Property Performance Checklist
1. Is Your Pricing Strategy Outdated?
Market rates are dynamic. A “set it and forget it” approach to rent will inevitably lead to underperformance.
- Self-Assessment: When was the last time you conducted a comparative market analysis for your property’s zip code? Are your rates competitive for the location, number of bedrooms, and amenities offered?
- Pro Tip: Flexible pricing based on lease length can attract high-quality, long-term tenants. Offering a slightly lower rate for a 6-month lease versus month-to-month can significantly reduce turnover costs.
2. Does Your Property Meet Corporate Housing Standards?
Today’s tenants, especially in the corporate housing sector, have high expectations. When an investment property is underperforming, a simple walk-through with a professional can often be a helpful start. A property that feels dated or lacks key amenities will be consistently passed over.
- Self-Assessment: Objectively evaluate your property. Is the décor neutral and modern? Is the technology (Wi-Fi, Smart TV) up to date? Are essentials like a fully equipped kitchen and an in-unit washer/dryer provided?
- Pro Tip: Even small upgrades, like adding a dedicated workspace or modernizing light fixtures, can dramatically increase perceived value and justify higher rent.
3. What Type of Tenants are you Attracting?
A vacant property is costly, but a bad tenant is catastrophic. Rushed placements often lead to property damage, late payments, and eviction proceedings.
- Self-Assessment: Do you have a consistent, written set of screening criteria? Are you conducting thorough background, credit, and eviction history checks on every applicant? Even if the answer is, “Yes,” is the type of property investment model you’ve selected the best option?
- Pro Tip: Working with a corporate housing management team eliminates the need for sophisticated screening tools because your tenants are corporations who vet their team members and pay their bills.
4. How Efficient is Your Maintenance Protocol?
Deferred maintenance is a classic sign of an investment property underperforming. Small issues like a leaky faucet or a malfunctioning appliance can escalate into costly repairs and create a negative tenant experience.
- Self-Assessment: Do you have a system for tenants to report issues easily? Is your response time swift? Are you using vetted, professional vendors for repairs?
- Pro Tip: An annual maintenance inspection can identify potential problems before they become emergencies, saving you significant money in the long run.
5. Is Your Property’s Presentation Top-Notch?
The “online curb appeal” is everything. Poor-quality photos and lackluster descriptions will ensure your property gets lost in a sea of listings.
- Self-Assessment: Are your listing photos professional, bright, and comprehensive? Does your property description highlight unique features and sell a lifestyle, not just square footage?
- Pro Tip: Your property should be professionally cleaned and staged between every tenant. This not only attracts new renters but also sets a standard of care from day one.
6. Are You Leveraging the Right Technology?
Modern tenants expect convenience. Online rent payments, digital maintenance requests, and electronic document signing are no longer perks—they are the standard.
- Self-Assessment: Is your management process still reliant on paper checks and phone calls? Are you making it as easy as possible for tenants to interact with you?
- Pro Tip: Hiring professionals to manage this for you means you don’t have to invest in, and keep up with technology. They have to.
7. Do You Have a Handle on Your Cash Flow?
Corporate housing can offer higher annual returns, while cash flow is often better than in short-term rentals, it can be less consistent than a traditional 12-month lease.
- Self-Assessment: Are you prepared for potential gaps in occupancy? Is your financial buffer (working balance) sufficient to cover utilities and other fixed costs during a vacancy?
- Pro Tip: A clear understanding of all expenses, from HOA dues to utility caps, is critical. Detailed monthly and annual statements are essential for tracking profitability. For more on this, see Investopedia’s guide to rental property expenses.
8. Is Your Investment Property Properly Insured?
Standard homeowner’s insurance is not sufficient for a rental property. An insurance gap is the fastest way for an investment to underperform, as a single uncovered event—like a fire or a liability claim—can erase years of profit. Without a proper landlord policy that includes loss-of-rent coverage, you risk total financial loss while your property generates zero income.
- Self-Assessment: Have you informed your insurance provider that the property is a rental? Do you have adequate liability coverage and loss-of-rent coverage?
- Pro Tip: Your corporate lease agreement should include an insurance clause that requires the corporation to maintain its own liability insurance and clearly defines responsibility for any damages caused by their employee.
9. Are You Maximizing Your Tax Deductions?
A key benefit of real estate investing is the tax advantage, but you can only claim what you track.
- Self-Assessment: Are you meticulously documenting all income and expenses? Are you taking advantage of deductions for depreciation, repairs, management fees, and travel?
- Pro Tip: At the end of the year, a comprehensive 1099 and a detailed annual statement from your property manager are invaluable for streamlining tax preparation.
10. If Your Investment Property is Underperforming…Do You Have the Time and Expertise to Self-Manage?Effective property management is a full-time job. Lack of time and specific industry expertise are primary reasons for an investment property underperforming.
- Self-Assessment: Can you realistically handle a 10 pm emergency call? Navigate complex fair housing laws? Negotiate with corporate clients? Or leverage the right connections to keep your property booked at maximum occupancy?
- Pro Tip: AvenueWest has the deep corporate connections, marketing reach, and professional management expertise to do all of that for you—so your property is promoted to the widest corporate audience, booked to its full potential, and expertly cared for, while you focus on what you do best.
Transform Your Underperforming Property into a Premier Investment
If this self-assessment has revealed gaps in your management strategy, don’t be discouraged. Recognizing an issue is the first step toward fixing it. Don’t let an investment property underperforming diminish your portfolio’s value; see it as an opportunity to refine your approach and significantly boost your returns.
At AvenueWest, we specialize in transforming well-located properties into high-performing, professionally managed corporate rentals. If you’re ready to stop worrying about the day-to-day details and start enjoying the benefits of a truly passive investment, we’re here to help.
Contact us today to schedule a property evaluation and learn how the AvenueWest system can maximize your rental income.
