Being a landlord, like anything else, is about making a living. You need to carefully guard your profits and spending if you want to get ahead, not to mention save energy in the process. That said, maximizing your income takes a lot of practice and attention to detail. Wherever you can reduce costs without sacrificing safety or quality, you should.
Each situation is different, but there are some general tips that can help you make the most of your rental property.
Consider these five guidelines to help increase profits and benefit more from being a landlord:
Pricing a property requires a delicate balance of marketing. You want to charge enough that you’re not missing out on money but offer a price that’s reasonably competitive and nets a renter quickly. Calculate your cost and revenue on each property, then compare other similar units in the area. Remember that location is the number one influencer of price, but updated decor and appliances will push for maximized rent as well.
Begin advertising at least a month before the lease ends, provided your current renter will not renew. This gives you time to gather interest from the community and find the most rent for the space.
These days, it’s all about working smarter instead of harder. Technology can help you cut your overhead when it comes to property management. Cozy, for example, is a rental management software that makes things easier than ever. The program allows you to screen tenants, collect applications and more. You can even collect rent online.
Keep track of your expenses throughout the year. Write down every expense, and you’ll reduce taxable profits, which lowers your tax bill. You can claim repair and maintenance cost on properties, deduct mortgage interest, deduct home office cost, and more. If you need advice on how to maximize your tax breaks, don’t be afraid to speak with a tax professional.
No, we’re not talking about marriage here; we’re talking about tenants. The perfect match will allow you to set a higher rent because they’re less likely to leave after the lease period expires. Plus, good tenants won’t cost you in repairs or damages once they vacate the rental property.
To draw in the right match, think about the decor and fixtures that will likely suit your ideal renter. It may take some research to get it right, but it’s worth it to help pull in worthy tenants.
There are plenty of other ways to improve your profit. For example, install solar panels at your rental property. You’ll likely get a tax incentive or rebate just for adding this energy-saving device. You can also sell excess power back to the grid for added income. Moreover, tenants will be willing to pay a significantly higher rent because of the lower energy costs.
You can also rent out extra space for storage or allow local businesses to advertise with a banner on your property.
More cost savings can also be realized by installing a tamper-proof temperature limiting thermostat in each rental unit. These pre-programmed tamper-resistant thermostats not only help you save energy costs, they help save wear and tear on your HVAC system, allowing for optimum performance throughout the life of the system.