Having a rental property can provide a nice source of income. However, if you’re putting in a ton of work that is filling up your downtime or tenants are coming and going, it could end up significantly reducing your earnings. Thankfully, there are ways to increase your income and even make it a passive one, meaning you can earn money while golfing or going on vacation.
Take tenant screening seriously
First off, we want to talk about tenants. We know that better tenant retention can help line your pockets. This is because the right tenants will be more likely to pay their rent when it’s due and they’ll be less likely to cause any damage to your rental.
These are the type of tenants you want in your property. So, when you’re in the phase of looking for new tenants, make sure that you screen them thoroughly. Don’t just choose the first person to apply. Check credit reports and run background checks, also contact references, such as landlords they’ve rented from before. And, keep in mind, when you’re creating leases, it’s a good idea to have them end during optimal rental months such as the spring or instead of the winter.
Boost tenant retention
To make sure you’re attracting the right tenants and boosting tenant retention, you’ll want to maintain your property well. Before marketing your property, make sure the paint is updated and check to see if you need new flooring. (Hardwood is usually a less costly option than carpet in the long run). Make sure that the property is clean, on the inside and the outside.
When you have tenants, make sure to handle any problems in a timely fashion to keep them happy. Always be friendly and professional with your tenants to build a good relationship with them. The goal is to keep reliable tenants as long as you can to reduce the number of times you have to look for new ones. This cuts down on how often your property is vacant and the costs that it takes to find new tenants.
Increase the value of your property with updates
You can increase the value of your property, not just with new flooring, but also new appliances. Older appliances are not very appealing to renters. But, newer appliances can up the price of your rental unit and they should last longer, reducing the need for more frequent repairs. They are often more efficient too, which can be a selling point if your renters are paying utilities.
Don’t pay for utilities with variable rates
Speaking of utilities, it can be more cost-efficient for landlords not to lump utilities that have variable costs into the price of the rental property. When the tenant has to pay these utilities, they’ll be more likely to watch how much electricity, heat and air conditioning they use.
If you’re paying the utilities, your bills may end up skyrocketing, because the tenant has less reason to be concerned about leaving the TV on or running the A/C when the windows are open. Also, if you’re paying for the utilities, you’ll need to increase the price of rent.
Price the unit competitively
Keep your pricing competitive. Check what similar, local properties are renting for and price yours accordingly. Underpricing can cut the income you’re making, but overpricing can reduce your chances of finding and retaining tenants.
Charge applicable fees
There may be times when you can charge extra fees. For example, if you decide to permit pets on your property, then charge a fee for this allowance. If your tenants are late, you can also add on a late fee. Just make sure all of this is covered in the lease.
Bring in extra income
Make extra money where you can. If you have a garage on your property, but not enough spots for everyone, then rent out each garage space for an additional cost. You can also add vending machines and coin-operated washers and dryers to bring in extra change. These are easy ways to bring in additional income.
Make it easy for tenants to pay rent
Encourage tenants to pay on time. One of the easiest ways to do this is to make the payment process easy and hassle-free. Writing a check and sending it in the mail or dropping it off somewhere isn’t always convenient. An online payment system can simplify the process.
Take all of your tax deductions
Don’t forget to save receipts for all of your deductions at tax time. If you pay for a property management company or you have maintenance expenses, make sure to keep a record of these. Take every deduction you are allowed to at tax time.
These are just a few tips you can use to help maximize your rental income. Let us help by turning your income into a passive one. We can take care of your rental property, handling maintenance issues, marketing the property and finding the right tenants. At PMI Richmond, we’ll work hard to help you get the best return on your investment.
