13 Tips for Maximizing Rental Income as a Landlord

Are you trying to learn how to increase income from your rental property and make your real estate portfolio as profitable as possible? You are not alone. Several landlords face the same problem; additionally, you’ll also need to try and maintain a steady inflow of funds. Making money with rental properties can easily be done in several different ways. Here are 13 tips that will help you: 

1. Resident-Proof Your Property

To avoid having to withdraw money from a security deposit for “normal wear and tear,” landlords must take all reasonable measures. This includes mentioning the prohibition of wall-mounted TVs in your lease, installing door stops, fixing towel bars into studs, and opting for  low-maintenance flooring instead of carpets. Taking steps that prevent your property from getting damaged by daily use is always the wise thing to do. 

2. Purchase The Right Insurance

Consider purchasing landlord liability insurance for another layer of security. Your profit and savings could be wiped out by the cost of just one lawsuit. In the unlikely event of a lawsuit, a reliable insurance cover will employ attorneys to defend you. 

Change to a structure-only policy by calling your insurance provider. Most homeowner policies cover both the exterior and interior of the home. There is little need to ensure their belongings if you are renting to a stranger. You may save $25 to $50 a month by doing this.

3. Crunch the Numbers

A rental property should be evaluated as an investment because it is one. Therefore, maximizing return on this investment is more crucial than maximizing rental property income. Even if you have the funds available to purchase a rental property, getting a loan to cover the costs of a property often yields a higher return on your investment.

Landlords can also choose to employ hard money loans to pay for the renovation of an investment property. Traditional financing has strict requirements, whereas hard money loans are flexible and can help you get your hands on the money you need in a short period of time. 

The value of the asset being purchased impacts whether a borrower will be approved for a hard money loan. Because a hard money loan is secured by the value of the collateral, even those with less-than-perfect credit, a history of foreclosure, or bankruptcy may be eligible to apply.

4. Create An LLC

A business that is profitable from the start, and stays that way, is on track to minimizing risk. Be aware of risk but refrain from “removing” it, as that is not achievable. Have a single LLC for your real estate holdings (this is the most popular entity choice for investors). Maintain a single LLC for your rentals; this LLC should not collaborate on any other projects or provide any other services (e.g. contractor work). The LLC will just hold property; nothing else. If you have any short-term investments (also known as fix-and-flips), put them in a different LLC. 

5. Make Use Of Tax Breaks

When trying to figure out how to maximize rental income, take your tax breaks into consideration. Too many landlords lose out on savings because they are unaware of what constitutes an authorized expense for tax deductions. For the upkeep of their property and in the repayment of debts, landlords are eligible for a variety of breaks. Most common tax deductions include:

• Mortgage interest deduction
• Rental property depreciation
• Repairs and improvements
• Travel expenses incurred while traveling for repairs and improvements
• Property taxes

BFPM’s qualified property consultants can guide you with these tax breaks. To book a quick consultation call with us, click here.  

6. Make Use Of A Written Lease Agreement

By putting terms in writing, a smart rental agreement helps you prevent pricey legal disputes. It is the most effective approach to express policies and formally define each party’s rights and obligations. For leases of less than a year, some landlords think oral agreements are sufficient; however, they come with additional risk. One person’s speech has the ability to be used against another. 

Effective rental agreements are prepared and tailored with the correct rental conditions, including information about the renter, the rent amount, the dates of the agreement, and any other rules. The leasing agreement can be altered to suit your needs and circumstances.

Rental agreements often specify what expenses are to be paid for by the renter. For instance, the rental agreement typically specifies that the resident is expected to cover the cost of gas and electricity. Without a rental agreement, you can find yourself paying expenses that you thought the resident would pay.

By reducing legal risk and establishing financial expectations, a solid rental agreement drafted, personalized, and signed by both parties can help you increase income from your rental property. 

7. Choose Your Property Management Company Wisely

Successfully making money with several rental properties is no easy task. This is where Beach Front Property Property Management experts can help you save your time and money. Delegating your marketing, maintenance and vacancies to us will allow you to step away from the day-to-day operations. Whether you’re an individual owner or represent a holding company, we can help you optimize rental property income, minimize risk, and let you focus on other important things. 

8. Purchase A Home Warranty

When renting out your property, things malfunctioning or breaking is inevitable. By purchasing a home warranty, you will be financially protected in the event of an unexpected damage that has the potential to deplete your savings. 

9. Carefully Screen Residents

The answer to the question, “How to maximize rental property income?”, is incomplete without this crucial point. The expense (in terms of money, time, and stress) of evicting problematic renters can be avoided by implementing a thorough screening process. Running a criminal and eviction investigation, along with carrying out a credit check, is a good way of getting an idea of your potential renter’s financial capabilities. 

10. Rent Out Fully Furnished Properties

Wondering how to make more money with existing rental properties? There’s a whole demographic that is in need of fully furnished properties. Auditors, travel nurses and contractual employees are just some of the few people in need of such homes. In fact, even vacationers and corporate organizations can be your clientele. The better the quality of furniture and fixtures, the better the returns you’ll get. 

11. Add-Ons 

If you have a garage in your home, you might want to consider renting it separately. If the additional space is properly situated and configured, you can rent it out to residents who don’t have cars. Instead of collecting a pet deposit from residents who have pets, ask them to pay a one-time fee or ongoing pet charge. 

12. Inspect Your Properties Regularly

As often as you can, stroll through your properties and conduct regular inspections. This provides you with an opportunity to bond with your residents and also gives you a chance to check for any problems or damages. This way, you can nip the issues in the bud before they require any significant and pricey repairs. 

13. Provide Storage Space

A trick to maximizing income from rental property is to offer extra storage space. No matter who the prospective renter is, storage space is something that will always be in demand! If you have unused basements, wide crawlspaces, attics, a shed in the garden, or large common areas, you can convert them into additional storage spaces for your residents. Mentioning the storage space along with your property listing will definitely increase the monthly rate for the unit. Alternatively, you can rent out the space for an additional cost, above and beyond the rent. 

Bottom line

Every action taken matters, whether it’s taking the time to speak to prospective renters, buying the right kind of insurance, or replacing the air filters on a property. By following these 13 tips, you have the opportunity to maximize your rental property income.