Is Your San Francisco Rental Property Underperforming? Our Property Management Solutions

Effective San Francisco property management is personal, professional, and reliable. That’s what we embrace here at Luminor Real Estate. 

The right property management partner will also ensure you’re earning as much as you can with your investments, and not losing money or battling rising costs. 

When you have a rental property that’s underperforming, it could be for any number of reasons. Maybe the property condition is deteriorating and a few updates and upgrades will make a difference. Perhaps tenant retention is an issue and you’re losing money on turnovers and vacancy. 

Maybe it’s just the market, and the particular property you’re trying to rent out is no longer desirable to a large part of the tenant population. 

Whatever the problem, we have the solution. Let’s talk about our San Francisco property management solutions, which make a huge difference in the performance of the properties that we lease, manage, and maintain. 

These are some of the things that make a huge difference.

Common Reasons Your Investment Might be Underperforming

Identifying an underperforming rental is the first step towards a turnaround. Here are a few common warning signs that we think can raise a red flag when it comes to profitability and success:

• Vacancy and Turnover Rates Are High

A rental property that consistently struggles to secure tenants is definitely underperforming, and the key to keeping your investment profitable is to ensure that the rental home remains occupied with high performing residents. Extended vacancy could be due to poor location, pricing issues, or property condition. Whatever the problem, having to fight for tenants can be exhausting mentally and also a huge drain on your finances. 

Turnover is even more expensive than vacancy. Keeping the good tenants you have in place contributes to more stability and income. If you’re working through a tenant turnover process every year when the lease ends, you’re likely losing money.

• Low Rental Income

Properties in San Francisco have the challenge of rent control to work with, but that doesn’t mean you shouldn’t be at market rates, at least. If your rental income barely covers your expenses—or worse, falls short—it’s time to investigate further. 

Negative cash flow is not unusual with investments in an expensive city like ours, and they can be understandable at the very beginning of your rental experience, when you’re paying down a large mortgage or in a challenge. However, you can’t come up short for too long and still succeed with the investment. Make sure you aren’t in an endless pattern of negative cash flow without any kind of path out. If you are, this underperforming property will remain an underperformer.

• Excessive Maintenance Costs

In San Francisco, we have a lot of older properties. That means additional repairs, usually. You might also be stuck with a poorly maintained investment, which will require frequent repairs that eat into your profits. If you can change course with more preventative strategies or with replacements rather than repairs, you may have a good shot at turning an underperformer into a success story. 

Maintenance costs are up all over the country. There’s a huge demand for labor and supplies and parts are pricey. This requires a smart strategy when you’re approaching maintenance, whether it’s your emergency response, your routine repairs, or your preventative services. 

• Negative Cash Flow

If you’re consistently putting money into the property without seeing adequate returns, you’re dealing with an underperforming asset. Upgrades and improvements should help you earn more rent. If that’s not the case, you’re only throwing your money into a property that isn’t succeeding. 

By staying aware of these common indicators that your property isn’t delivering what it could, you’ll quickly identify which properties are falling short of their potential and save the endless analysis that can have you wondering where you’re going wrong.

Steps We Take at Luminor Real Estate to Turn Around Underperforming Investments

We invest not only in high profits and reliable earnings for our property management clients, but also in your peace of mind. We don’t want you worrying that you’re losing money. Here’s how we proactively take an underperforming property and transform it into a thriving, profitable rental home. It’s about processes, experience, and good technology. We have all of that and more.

1. Leaning Into Market Trends and Shifts

We won’t be leaving the performance of your property to chance. Our team is always taking a close look at the local market and how it’s performing. If the entire rental market is suffering from lower prices or higher vacancy, we’ll know that we have to be creative in order to succeed. If it’s only your investment that seems to be struggling against an otherwise robust rental market, we’ll know we have to zero in on why there are problems with a particular property or building. 

The data and the insights we gather allow us to take a close look at local market data, such as current rental demand, rental values, and local demographics in the area. We’ll understand how to better position your rental property when we know whether there is a lot of competition, and if those other rentals are thriving. We’ll analyze what we gather in order to align your property’s potential with market expectations. And, we’ll make changes in the way we work when we detect patterns that require it.

• Paying Attention to San Francisco Rental Property Pricing

Pricing impacts everything from marketing to tenant quality to retention. We know that we can only increase your rental value so much, especially if your property is covered by The Rent Board’s stabilization limits or the rent control imposed by the state law. 

Pricing is a big part of our performance strategy, however, even within those constraints of rent control. We know that the wrong rental price can discourage potential tenants while leaving your property vacant longer than necessary. A maximum renewal rate can chase good residents out of your property, leaving you with a vacancy and the hassle of marketing and upgrades. 

We study pricing models, competing rental units, and nuanced analytics like location, building, and amenities to make sure you’re getting the pricing right. We will compare your rental rates to market benchmarks and determine if perhaps we’re asking for too much or not charging enough.

Adjusting pricing to align with competitive rates can make an immediate difference in occupancy, tenant quality, and profitability.

• Investing in Preventative Maintenance

When you’re losing money because of deferred or unreported maintenance, we are quick to fix that. While no one wants to rent out (or rent) a deteriorating property, at least this is a quick fix. One of the easiest ways to lose money on an underperforming property is to let property conditions deteriorate. 

Luminor Real Estate prioritizes preventative and proactive maintenance. We invest in repairs, and more than that - we invest in updates and improvements to raise your rental value as well as your earnings. Improvements such as fresh paint, new flooring, or modern appliances can make a property more attractive to tenants and allow you to bring in higher rents. Make some upgrades that may lead to quick ROI, including energy-efficient features like LED lighting or smart thermostats. You can also create curb appeal with modern landscaping or a refreshed entryway. Update outdated kitchens or bathrooms for maximum impact and make sure you’re prioritizing preventative maintenance, which is far more cost-effective than deferred maintenance or unreported repairs. 

• We Market Rental Homes Effectively

Don’t underestimate the power of strategic marketing in the way your rental property performs. You might have the most attractive rental unit on the market. That’s not going to bring in the rents or the great tenants if you’re not letting the entire market know about what you have to offer. We are constantly evaluating our marketing strategy. High-quality photos, compelling listings, and advertising on the right platforms can dramatically boost your property's visibility, and we do all of that for you and more.

Investing in Professional San Francisco Property Management

When an owner comes to us, frustrated because they’re not earning what they thought they’d earn on their property, the first thing we ask is whether they’re working with a management partner. 

If they say no, we’re not surprised that they’re underperforming. 

San Francisco is a unique market. It’s expensive, it’s competitive, and it’s governed by a lot of very locally nuanced laws and tenant protections. If you want to succeed and maximize your earnings, you need the support and the resources of a property manager. 

Turning Around Underperforming Rentals Matters to Luminor Real Estate