by Susan Paige
Owning some rental properties is an excellent way for you to invest in real estate while earning an income. However, it can be risky for you to acquire too many properties at one time.
Instead, it’s better to ask yourself, “How can I get the most money out of each of my properties?”
Keep reading to learn how to make money with rental properties without overextending yourself.
1. Decrease Total Turnovers
The best way to keep a steady income on your properties is to find a tenant who plans on living there long-term. This will help avoid the amount of time your rental space is left vacant and will keep you earning a steady income on that property.
Not only do you lose the income from your occupancy, but you will also have to freshen the property for the next tenancy. This means replacing the carpet or other damaged flooring, fixing any damages on the walls, and adding a fresh coat of paint. If you have a high turnover rate of tenants, then you will be replacing these items more often.
You might lose tenants if they are planning on moving to a new area or need more space. Or you might lose them because your rates aren’t competitive and they can find a better deal with a new landlord. You want to make sure you are staying familiar with what the local prices are in the area and maintain a reasonable cost of living increase each year.
Another reason tenants might leave is if they feel that their landlord doesn’t provide good customer service. As the landlord, make sure you are keeping a good line of communication, address any repairs or service requests that are made in a timely fashion, and treat them with a professional level of respect. A good tenant will reconsider moving if they have a good landlord.
2. Furnished Units
When you lease an apartment or house furnished, you can charge more money for the rent. A furnished apartment is an excellent opportunity for tenants who are just setting out on their own and probably don’t have a lot, or any, furniture of their own. They are more willing to pay more monthly than to have to purchase all new furnishings of their own.
There is some risk involved that the tenants could damage the furniture, so make sure and charge them a higher security deposit. Tenants are also expecting the furniture to be used so in the event something does get damaged, you can easily replace it with more used furniture. Of course, if the tenant is careful and takes care of your belongings, they will get their money back, but if not, you are still covered.
When looking for pieces to furnish your property, make sure you stick with a neutral color scheme, such as brown or black. This way, it will be easy for your tenants to coordinate any of their personal items. It will also be easier for you to replace any items in the event they do get damaged.
3. Offering Services
Another great way to make some extra money off of your properties is by offering your tenants housekeeping, lawnmowing, or pool services. You can add the services as part of the monthly rent, so there is no concern over trying to collect a separate payment. Services can be arranged with local service providers, which are often more cost convenient that national companies and also helps support your local businesses.
Another great advantage of offering your tenants these services is it guarantees that the apartment or house, pool, and lawn are being consistently maintained. This helps keep the value of your property up and reduces the number of repairs or replacements that will be required if they move out. It also helps keep the neighbors happy since they won’t be living next door to an eyesore.
4. Be Tough with Late Fees
Being a decent landlord and showing your tenants kindness and respect doesn’t mean that you should also let them walk all over you in terms of paying their rent on time. Even though it can be uncomfortable when it comes time to collect the rent, its part of the business, and your tenants need to know what is expected of them and that they signed a contract agreeing to the terms.
If your tenants are allowed to pay their rent late, without paying late fees, then you are essentially losing money. Your tenants will then know that they can get away with making their payments late, without the fees, and will continue doing it. Over time you will not only lose money but will cause you extra work and undue stress.
Before getting stuck in this loophole, set the precedence that you can’t collect the rent payment, without the fees included, the very first time it happens. Politely, but firmly, explain to the person that the rent will not be considered paid until you have collected all the late payment fees. If you don’t give in, they will learn that you are not the type of person who will be taken advantage of, and they will strive to make the next payment on time.
Know You Know How to Make Money With Rental Properties!
These are some great tips to get you started on how to make money on rental properties. Overall you should be able to increase your profit by being a decent landlord, offer furnishings or household services, and not allowing your tenants to avoid late fees.
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