Most rental property owners will tell you, regardless of whether they own one rental property or several, that renting out a property is not as easy as it looks. Many people are aware that leasing property comes with some challenges, but they may assume that because owning a rental property is a “passive” form of income, it doesn’t take much effort. But that couldn’t be further from the truth.
The strain of owning a rental property depends on the number of properties you manage, the resources you have to help manage your responsibilities efficiently, and the demands of your tenants, among other factors. Although renting property can create a convenient and regular income, it doesn’t come without work or maintenance.
So how can you maximize the return on your investment? There are several things you can do to not only make your life a little easier, but to make sure you’re getting the most money back from your property.
Do Your Research
Your first rule of thumb for maximizing your rental income is to research local tax laws and other tips that benefit real estate investors and landlords. Many landlords miss out on tax breaks related to their property simply because they weren’t aware of the benefits.
Taking the time to research property law, the ins and outs of managing property, and talking to others who are already established in the business is not only insightful, but saves you time, stress, and expenses from making accidents in the housing industry. Although it takes time now, research pays off in the long run.
Evaluate the Real Estate Market
Another area to be familiar with is your local real estate market. Keep an eye on local property values and how much they’re selling for, as well as other rental properties and what they are generally charging for rent.
If you live in an area that is experiencing a great deal of growth in both residential and commercial properties, you might consider raising the rent to reflect that growth. Similarly, if businesses are shutting down and property values are dwindling, consider lowering your rent prices to draw in more tenants.
Decrease Your Turnover Rate
Another factor to consider is your turnover rate. Long-term tenants offer a steadier income and will potentially be more responsible about maintaining the property because they are there for a longer period.
Short-term tenants not only tend to care less for the property where they are residing temporarily, but they cost time and money when you’re constantly left with vacancies that require advertising and effort to fill. When given the chance, it is more beneficial in the long run to rent to long-term tenants.
Once you’ve found a tenant, invest the necessary resources to help them have a good experience with the property and with you. Be reliable, answer them promptly when they need repairs or maintenance done, and treat them with respect. Again, keeping a long-term tenant will equate to more regular income than a constant turnover of less-than-happy tenants. Plus, unhappy tenants could leave negative reviews that impact your ability to find future tenants.
If you’re struggling to keep on top of all the necessary requirements that come with being a landlord, it may be helpful to work with a property management company. An experienced property manager can communicate with tenants, be responsible for advertising and finding new tenants, take care of regular maintenance, and more. Although it does cost money, in some cases, working with a property manager can help you maximize your rental income by saving you time and helping you fill vacancies more quickly than you could yourself.
However you decide to manage our property, these basic steps will help you have a better experience renting to tenants. Follow these tips to capitalize on your rental investment!