Is your rental property portfolio performing at its full potential? Many Colorado real estate investors are unknowingly leaving money on the table through under-market rents, missed revenue opportunities, or inefficient operating procedures. A comprehensive portfolio health audit can uncover these hidden opportunities to boost your net operating income (NOI) and maximize your return on investment.

Episode Overview

In this informative episode, Brandon and John of Keyrenter discuss the importance of regular portfolio health audits. We shared our process for evaluating properties across rent rates, costs, and compliance issues. Through case studies, we showed how small adjustments can significantly improve property performance. We also highlighted common issues that impact rental property profitability.

https://youtu.be/QZyNloX_-YU

Timestamps

(00:26) Introduction
(03:42) Maximizing Rental Income Through Market Assessment
(08:26) Smart Home Technology and Value Add Features
(12:13) Maintaining Property Value Through Preventative Maintenance
(15:38) Compliance Requirements for Denver Rental Properties
(32:40) Case Study 1: Colorado Portfolio Analysis
(40:44) Case Study 2: Premium Rent Achievement Strategies
(44:48) Case Study 3: Fourplex Renovation Returns
(47:30) Q&A and Final Thoughts

What Is a Portfolio Health Audit?

A portfolio health audit is a comprehensive evaluation of your rental properties to identify opportunities to increase revenue, reduce expenses, and enhance overall performance. The process examines current rental rates against market standards, reviews operating costs, ensures compliance with local regulations, and analyzes other performance factors to improve profitability.

“Essentially the goal is to provide you with opportunities to improve efficiency and boost profitability on your portfolio,” explains John from Keyrenter Denver, highlighting the purpose of these evaluations.

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• A complete audit typically begins with gathering essential information about your properties, including addresses, property details, current lease agreements, utility bills, and property listing details
  
• The most valuable insights often come from comparing your current rental rates against market standards and identifying areas where you might be leaving revenue on the table
  

I emphasize the importance of regular check-ups: “My rule of thumb is once a year. Check numbers once a year, especially, hey, it’s just like you go to the doctor. You’re supposed to go to the doctor once a year for a physical health checkup. Same thing.”

Maximizing Rental Income

One of the most common issues for rental property owners is pricing their properties below market value. While setting the correct rent is crucial, the timing of lease cycles and additional revenue sources can impact your bottom line.

“I see the number one mistake in many people’s portfolio is their rental property is under-rented,” I noted during our conversation, highlighting a widespread issue among rental property owners.

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• Strategic pricing should aim to be at or slightly below market rates to minimize vacancy and attract quality tenants
  
• Consider adjusting lease terms (6, 12, or 18 months) to align expiration dates with peak rental seasons (late spring/summer)
  

Brandon from Keyrenter adds valuable context: “Best case scenario is be at, or just below market rent. That way you’re going to be able to rent your home quick. You’re going to get great tenants and probably going to renew at the end of the year.”

Utility Bill-Back Programs

We identified utilities as a common area where landlords leave money on the table. Rather than including utilities in the rent, separating these costs can improve transparency and ensure proper cost allocation.

“A lot of people usually are leaving revenue off the table or on the table when they’re not doing some type of utility bill back,” John points out, identifying a missed opportunity for many landlords.

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• Consider charging separate fees for utilities rather than bundling them with rent
  
• When advertising, it’s better to list rent and utilities separately (e.g., “$2,000 rent plus $100 utilities” rather than “$2,100 all-inclusive”) as renters typically compare base rents when browsing listings
  

Property Presentation and Management

Professional property presentation can dramatically impact both your ability to attract quality tenants and the rental rates you can command. Our panel emphasized that small investments in property marketing can yield significant returns.

“Spend a couple of hundred dollars on photos and really just get them professionally done because that just goes such a long way,” advises John, highlighting one of the most cost-effective investments a landlord can make.

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• Professional photography ($200-300) offers an excellent ROI, as these images can be reused for several years
  
• Consider seasonal photos (capturing the property during different times of year) to enhance marketing efforts year-round
  

Beyond presentation, maintenance response time emerged as a critical factor in tenant satisfaction and retention. Brandon shared a striking statistic: “The data shows it was like over 70% of tenants who non-renew cited maintenance response…or quality of repairs and things like that as the reason.”

Regulatory Compliance and Risk Management

Staying compliant with local rental regulations is essential for avoiding fines and legal issues. We highlighted Denver’s rental license requirement as a specific area landlords need to address.

“If you have a rental property in Denver without a rental license, you should go get that because you’re, I think, what, two years past due at this point,” I reminded listeners about this important compliance issue.

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• Denver rental licenses must be renewed every four years
  
• While the inspection process may identify some safety upgrades needed, most properties don’t require major investments to pass
  

We also discussed preventative maintenance as a key risk management strategy. Regular system checks and addressing small issues before they become major problems can save substantial money over time.

“It’s amazing how far that can go of just having a basic checklist of, hey, let me just look over the property and check these few things. There’s a lot of things that like, yeah, if you stay on top of it, it’s not going to be a big expense at all,” Brandon explains.

Conclusion

Conducting a regular portfolio health audit is essential for optimizing the performance of your rental properties. By examining your current rental rates, exploring additional revenue opportunities, improving property presentation, and ensuring compliance with local regulations, you can significantly enhance your property’s NOI and long-term returns.

As I put it during our discussion: “The majority of my net worth are in these rental properties and I can’t carve out five hours a year to come in here and actually make sure that this multimillion dollar asset, these multimillion dollar assets are running well? Shame on me. That is just stupid.”

If you’re not already conducting annual audits of your rental portfolio, now is the time to start. Consider reaching out to Keyrenter Denver for a free portfolio health audit to identify improvement opportunities.

Connect with our Guests

Email Brandon Scholten: brandon@keyrenterdenver.com

Links from Podcast

Keyrenter Denver: https://keyrenterdenver.com/

Who is Keyrenter?

Keyrenter Property Management Denver provides rental solutions for homeowners and real estate investors in the metro area who are interested in transforming their properties into passive income. It offers various services, from property marketing and thorough applicant screening to tenant placement and 24/7 maintenance services. Keyrenter Denver’s team of experts can take the clients’ burden of managing their rental off their hands so they can get back to what matters to them.