As a real estate investor, you have the unique opportunity to make a fantastic living while providing great homes for others. The average rent for a one-bedroom apartment is over $1,000, and if you have single-family homes to rent, you can charge even more.
But how do you get the most rental income possible? Well, the first choice is to take on major renovation projects, such as new kitchen appliances or a bedroom addition. These are so expensive, however, that they can be counterproductive for rental owners.
Luckily, you don’t have to break the bank to get the most out of your rental property. And we’re here to help you do it! To learn a few rental income tips to maximize your revenue, just keep reading.
Start With the Right Rental Price
The first step to boosting your rental income is to ensure you’re not charging too little for your property. Many rental property owners fear losing out on rental income altogether by overcharging, so they undercharge to fill their properties.
What you should actually be doing, however, is charging a little bit more than similar houses are renting for. The best place to start is with a rent proration calculator, there are many free ones available to use online. This will give you a ballpark estimate of what your home is worth.
Then, do your own market research. Look up properties similar to yours and make a list of what each costs to rent, then set your price accordingly. And if you can, it’s never a bad idea to get advice from a real estate agent or property manager as well.
Keep Up With Maintenance
If you’ve ever sold your home, you know how important it is for the house to be in top condition if you want to get the most out of the sale. Renting out a house is similar. A home lacking curb appeal with small repairs needed here and there will rent for far less than an inviting, well-kept home.
Caring for your rental properties as if you lived there yourself will do wonders for increasing rental income. Don’t allow the yard to fall into disrepair, the paint to fade, or repairs to go unnoticed.
Keep the exterior of the house clean, the front porch welcoming, and the interior and exterior bright and cheerful.
Choose Tenants With Care
When you own rental homes, your tenants are everything. A good tenant can make your job a breeze, while a bad one can quickly turn a dream scenario into a nightmare.
Interview every tenant before you agree to rent to them. And even if they seem polite and responsible, take the time to reach out to past landlords for references and run credit and background checks.
Between missed rent, eviction fees, repair costs, cleaning bills, and countless hours of stress, a bad tenant can cost you a great deal. Thorough screening won’t prevent 100% of these events, but it will drastically cut down on the number you encounter.
Allow Pets for a Fee
Making some or all of your properties pet-friendly is a gamble, but so is renting them out in the first place. Finding places to rent with pets can be difficult, meaning that those who do allow pets are able to charge more.
By allowing pets, you can charge an initial pet fee as well as a monthly pet rent. Even if you put the pet fee aside in case of repair costs when the tenant moves out (and you should), you’ll have the extra amount in pet rent added to your income each month!
Offer Short Term Leases
The standard lease term is one year, and offering such a lease is a must. But if you can, it’s wise to offer short term leases as well. The shorter the lease, the higher you’re able to charge for rent, as these terms are hard to come by.
For example, let’s say you rent your home at $1,500 per month for a 12-month lease. A 6-month lease could be $1,650 per month, and a 3-month or month-to-month lease even higher.
Yes, you’ll have turnover costs more frequently, but the additional income should be more than enough to make up for it.
Hire a Property Manager
Hiring a property manager might sound like bad rental income advice. After all, don’t they charge money to manage your properties? The answer is yes, they do. But with a good property management company, it’s worth paying the 10% every month!
Property managers know exactly what to expect with every aspect of the rental process. They’ll set your home at the correct price, screen every potential tenant and choose the best one, handle turnover and maintenance, and complete rent collection.
These professional services will help cut down on late rent and evictions, two things most damaging to your rental income.
Not to mention, if your tenant ever has a question or concern, they’ll call the property manager, not you. Don’t worry – if the problem is serious, you’ll be contacted. But do you really want to receive those 2 a.m. calls because your tenant can’t find the breaker box?
Maximize Your Rental Income With This Guide
As a property owner, the best way to maximize your rental income is to do everything you can to ensure that you have good tenants and that they’re kept happy. Though this takes some diligence, it’s not as difficult as it might seem.
By maintaining a clean, attractive house, providing desirable amenities, and caring for your tenants’ concerns, you can get the most out of your properties.
Interested in learning more about getting the most out of your investments? Take a look at our blog!
