How to Reposition Underperforming Properties for Maximum ROI

Not every investment is a home run out of the gate. If you’ve got underperforming properties sitting in your portfolio, don’t panic—you’re not alone. Even seasoned investors run into deals that don’t produce as expected. But here’s the good news: most of the time, underperformance isn’t the end of the story. It’s just the middle.

With the right strategy, you can reposition a struggling property and turn it into a solid ROI machine. Whether you're new to the game or have a few deals under your belt, here's how to spot the problems, shift your approach, and breathe new life into your asset.

Start by Diagnosing the Problem

Before you can reposition anything, you need to figure out why the property is underperforming in the first place. Ask yourself:

• Is it a location issue?
• Are rents too low or expenses too high?
• Is the property in poor condition?
• Are you attracting the wrong type of tenant?

Let’s say you bought a duplex in a decent area, but you’re getting turnover every six months and struggling to hit cash flow projections. That might indicate you're not targeting the right tenant profile, or the units aren’t updated enough to justify higher rent and attract longer-term renters. It’s worth understanding how investor mindset affects success to make more informed decisions.

Improve Curb Appeal and Interiors

First impressions matter. Simple upgrades to both the exterior and interior can have a major impact on tenant demand and rent prices.

Easy wins include:

• Landscaping and exterior paint
• Updated lighting fixtures
• New cabinet hardware or countertops
• Fresh paint and modern flooring

Example: A tired-looking 4-plex in Hamilton, Ontario, was struggling to fill vacancies. After a $15,000 refresh focusing on curb appeal and kitchen updates, the owner raised rents by 25% and filled all units within 3 weeks. These are just a few simple improvements that boost property value quickly.

Reevaluate Your Tenant Strategy

Sometimes, the problem isn’t the property itself but who you're marketing to. Are you trying to attract families in an area filled with college students? Are you advertising on the right platforms?

Consider who your ideal tenant really is—then make sure your listing, price point, and amenities match that profile. You might need to adjust your strategy based on tenant needs to reach better fit renters.

Example: A 1-bed downtown unit in Montreal was struggling to rent until the owner repositioned it as a furnished short-term rental for traveling professionals. Within 60 days, the property became one of their top cash-flowing assets.

Shift Your Operating Model

If your current property strategy isn’t working, it might be time for a pivot.

Consider options like:

• Converting to short-term or mid-term rentals
• Renting by the room
• Offering furnished units for traveling nurses or corporate stays
• Partnering with housing voucher programs
  
  

A single-family home near a hospital in Toronto, for example, might earn twice as much monthly revenue as a furnished mid-term rental versus a long-term tenant lease. Understanding the pros and cons of short-term vs. long-term real estate can help you decide.

Raise Rents Strategically

This doesn’t mean just jacking up prices—it means earning the right to charge more. Once you’ve made improvements, adjusted your marketing, and created a more appealing product, make sure your rents reflect the new value.

Always look at comps in the area and price accordingly. If you’ve added features tenants care about (in-unit laundry, pet-friendly policies, better lighting, etc.), you’ll likely be able to justify a higher rent. You can also use the 1 Percent Rule to guide pricing in a way that keeps your returns healthy and competitive.

Refinance or Restructure Financing

Sometimes an underperforming propertie is suffering more from your financing than the actual income it generates. High interest rates, short-term loans, or balloon payments can eat into cash flow.

Once you’ve increased NOI (net operating income), look into refinancing at a better rate or restructuring your debt. This move should fit into larger financial planning strategies for real estate investors so that you're not just saving money—but growing it.

Example: An investor in Vancouver refinanced their 6-unit property after boosting NOI with better tenants and minor renovations. The new financing lowered their monthly payment by $700, pushing the property from negative cash flow into strong profitability.

Monitor and Optimize Expenses

It’s not just about making more money—it’s also about spending less. Review all your property expenses and ask:

• Are there cheaper vendors for landscaping or maintenance?
• Can I switch to energy-efficient appliances or lighting?
• Is my property management company worth their fee?

Every dollar saved is a dollar back into your ROI.

Know When to Exit

Sometimes, repositioning isn’t the best move—selling is. If the market has shifted, the area is declining, or you’ve simply hit your ceiling with the property, it might be time to cash out and redeploy your capital into a higher-performing asset. But make sure you know how to evaluate promising real estate opportunities before jumping into the next deal.

This isn’t failure—it’s smart portfolio management.

Final Thoughts: Every Property Tells a Story

Just because a property isn’t performing right now doesn’t mean it’s a lost cause. With the right tweaks—whether cosmetic, strategic, or financial—you can turn that underperforming properties into a high-yield investment. It just takes clarity, creativity, and the willingness to adapt.

And if you’re looking to learn more strategies like this and surround yourself with investors who are actively doing the work, you don’t have to go it alone.

Join WealthGenius, the fastest-growing real estate investment community, and gain access to the education, tools, and network you need to scale smarter, faster, and with more confidence.