Investing in rental property might be one of the best real estate investments. Arguably, the best part of it is the ability to boost your rental income.
When investing in rental property, you will not have to worry about an income. Rental properties are one of the best types of income properties. Not only that, but they are also one of the fastest ways to get rich in real estate investments.
Related: Buying Rental Properties to Grow Your Real Estate Investment Portfolio Is a Must. Here Is Why
If you are wondering how to make the most money from your rental properties, then this blog is for you. Here are the best tips on boosting your rental income:
Investing in rental property: Perform investment property analysis
When buying rental properties, it is important to pick the profitable ones. The only way to know, though, is through investment property analysis. The profit determinants are simply real estate metrics. These metrics are used to estimate the return on investment for a rental property. The capitalization rate and the cash on cash return are the most common evaluation methods to do so. Therefore, it is a must to learn to calculate these metrics in order to make sure you are putting your money into positive cash flow properties.
To you, it might seem too much work to do. However, these calculations can be easily done using the return on investment calculator. This online tool is a favorite for real estate investors. It has taken real estate investing to a whole different level ever since it was created. Therefore, you should follow the lead of other successful real estate investors in order to be able to make the most money when investing in rental property.
Related: What’s the First Thing You Need in Real Estate Investing? A Rental Property Calculator!
Investing in rental property: Pick the best places to invest in real estate
We have listed this separately due to the importance of location in real estate investing. The main key to succeeding when investing in rental property is the location. Yet, this is another usage of the return on investment calculator. It is called a calculator, but it also goes far beyond numbers and figures. It also gives you a sense of a particular location. In this way you can avoid any unprofitable areas for your rental investment business.
Investing in rental property: Invest in positive geared properties
If you want to be investing in income properties, then positive geared properties are the way to go. They are also called positive cash flow properties as they generate a positive cash flow. Your goal in real estate investing is making money, and that is exactly what positive geared properties are about. You will have your rental income, subtract the rental expenses, and there you go: your cash flow is the rest.
However, if you are left with nothing on hand each month, that is when you need to be concerned. In fact, this is the very reason we recommend that you regularly perform investment property analysis using the return on investment calculator. Not only should you use it when buying rental properties but also when you are already operating your property.
Related: Positive Gearing and Negative Gearing in Real Estate Investing
Investing in rental property: Charge extra
The best part about investing in rental property is the variety of ways in which you can boost your rental income. You can always add some services that your tenants appreciate and charge extra for that. Also, if your tenants have pets, you can charge a monthly fee on that. Do not worry, many real estate investors do that, and it is totally OK!
Investing in rental property: Choose the right tenants
Your tenants are a huge part of your success. The best idea to make sure you have good tenants is running a background check on them. It does not have to be a high-level background check. Your goal is to make sure that your tenants are capable of paying the rent on time. Also, make sure that they do not have a bad renting history. After all, you want your property to be in safe hands.
Investing in rental property: Get good insurance
Getting a good insurance policy when investing in rental property is a great idea. In case of any damages, you want to have a back-up for your income properties. You can ask other real estate investors what insurance they have and pick the best policy. Just make sure to check the terms and conditions thoroughly first.
Investing in rental property: Use tax benefits
Investing in rental property comes with tax benefits. This might be the best part of real estate investments for landlords. Check what tax deductions apply to your property and take advantage of them. There are tax deductions that apply to rental expenses. There are also tax benefits on any losses your income properties experience. At first, you might think that the amount of money is not worth it. However, in the long term, you will find that you have actually saved a considerable amount of money.
Investing in rental property: Rent excluding utilities
If you ask expert real estate investors, they would tell you that your rent should not include utilities. Electricity and water should be excluded from it if you want to be making the most money in real estate investing. Remember that the best real estate investments are those that have the potential to generate as much money as possible.
Investing in rental property: Do regular check-ups
Finally, regular check-ups are a must. This does not mean that you will have to intrude your tenants’ privacy. On the contrary, your tenants will appreciate respecting their privacy. Thus, make appointments ahead of time, and let them know that you will be visiting to inspect the property. Of course, they understand that it is a routine thing that every landlord does, and you do not have to be shy about it.
Mashvisor is your guide when it comes to real estate investments. Therefore, if you want to learn more about investing in rental property, make sure to sign up for Mashvisor and learn what it takes to become a landlord. You can also use Mashvisor’s rental property calculator. It will help you perform accurate real estate market analysis as well as investment property analysis to always find the best income properties for your investment business.