It might surprise you to learn that houses in the United States now cost over $350,000 on average. As a result, it’s become more difficult than ever before for first-time homebuyers to find a place of their own.
One of the greatest attributes of owning your own home is that you can rent it out to other people to generate rental income. However, owning a rental property is only part of the equation.
Being a landlord comes with many responsibilities, and you’ll need to understand certain information if you want to make the most passive income possible. Let’s take a look at clever ways you can increase your rental income.
1. Never Neglect Property Maintenance
As a landlord, you are responsible for maintaining the property you are renting out. This includes everything from regularly scheduled cleaning and painting to more significant repairs, like fixing a leaky roof or clogged pipes. While it may be tempting to put off certain repairs to save money in the short term, this is usually a bad idea.
Not only will your tenants be less likely to renew their lease if the property is in disrepair, but you may also end up having to pay more in the long run if the problem isn’t fixed quickly.
2. Consider Making Upgrades
Another way to increase your rental income is by making upgrades to the property. This could include anything from installing new appliances to renovating the bathrooms or kitchens.
These upgrades make your property more attractive to potential tenants. They could also help you charge higher rent prices. Just be sure to factor in the cost of the upgrades before making any decisions.
3. Find the Right Tenants
It’s also important that you take the time to find the right tenants for your property.
This means screening potential tenants carefully and looking for those who have a good rental history. It’s also a good idea to require a security deposit from your tenants.
This will help you protect yourself in case of any damage that occurs. When screening tenants, you should prioritize renting to those who have a clean criminal record and a substantial amount of income.
More often than not, this will help minimize the number of complications that you encounter. Keep in mind that there are certain criteria you cannot discriminate against when it comes to renting your property out. This includes age, religion, sex, and ethnic background.
4. Vigilantly Enforce Rules
Some people are more passive than others. However, you will need to actively enforce the rules that you set if you want to generate the most income. This means that you shouldn’t be afraid to collect late fees on rental payments.
Similarly, don’t be apprehensive about imposing other fees that could help protect your property or reduce your costs in the future. For example, if you recently upgraded the house you wish to rent, it would make sense to charge your tenants extra fees if they own pets.
Dogs and cats are notorious for scratching the corners of walls, ripping up carpets, etc. Although it may seem unpleasant at first to impose these restrictions on tenants, it’s a necessary step you must take if you wish to be a successful landlord.
5. Hire a Property Management Company
Interestingly, this is something that many people tend to overlook.
However, it can be one of the most beneficial investments made. A property management company will handle all of the nuances of being a landlord that many people find difficult.
For example, they will be the ones screening tenants, marketing a vacant property, and organizing all of the fine details so that you don’t have to. Many people are initially reluctant to hire a property management company due to the money that it costs.
However, you should consider the amount of time that you save. If they save you 10+ hours per week and only take a small percentage of your rental income, this service easily pays for itself.
Not only will handling everything on your own take up more of your free time, but it can also cause a significant amount of stress. At the end of the day, handling this obligation is not worth the toll it takes on your mental health.
What Should I Look For in a Property Management Company?
As you might guess, you will want to find a property management company that has a proven track record. A quick Google search can offer insight into the type of experience you can expect from hiring them.
See what past clients have had to say and look for consistency within their feedback. If many people say that the property management company is difficult to get in touch with, this is likely a scenario you will also experience.
Of course, you should also prioritize working with a property management company that you feel comfortable communicating with. If they don’t seem to emphasize your needs or goals, they likely won’t be able to deliver the level of service you require.
Finally, be sure to inquire about their billing policy. You don’t want to encounter any financial surprises in the future.
Maximizing Rental Income Is Easier Than It Seems
By following these tips, you can maximize your rental income and enjoy the financial benefits of being a landlord. Just be sure to stay on top of property maintenance and screen tenants carefully to avoid any problems down the road.
Our blog has plenty of other articles like this one that can help you out in the future. Be sure to take a look!