Having income properties is a great thing. However, what makes a real estate investor make more money than others in the same business? Let us take a look at the best ways to make money from your income properties.
First: What are income properties?
Income properties are properties that are developed or purchased to produce income. The income could be produced by renting out, selling, or appreciating. The income property could be residential, commercial, or even industrial.
Related: Income Properties: Finding the Balance Between Passive and Active
Second: How to make money from your income properties?
Look for the top locations for income properties
We are sure you have seen the word location everywhere by now. So, yes, it is the most important aspect of real estate investing. In order for your property to produce good income, you must find the top locations for income properties. You can use a real estate investment calculator to analyze locations. Pick an area and fill in the required information. As a result, you will have access to some statistical data related to this specific area. Therefore, you will not have to keep going back and forth analyzing the locations on your own.
Use an investment property calculator
A real estate investment property calculator is an important tool to determine the top locations for income properties. Not only that, it is also used to determine how certain income properties are performing. Such tools help a real estate investor calculate accurate figures of real estate metrics that will help you perform accurate investment property analysis. These metrics include cap rate, cash on cash return, net operating income, cash flow, return on investment, etc.
With a real estate investment property calculator, an investor can avoid investing in income properties that show poor performance. It can also help determine the shortfalls of an income property, and, therefore, help to fix it.
Moreover, you can use an investment property calculator to choose the best real estate investment strategies to work with, thus saving the time and effort of trying all the different strategies.
Keep your income properties occupied
The number one goal for you as an owner of income properties is to keep them occupied in order to produce income. You can avoid vacancies by taking the right real estate investment strategies. For example, if you have a rental property, then you would want to rent it long term in order to keep it occupied. This is, indeed, a great way to keep the cash flowing for longer periods. This point will lead us to the next tip.
Related: 7 Tips to Avoid High Rental Vacancy Rate
Minimize property expenses
Owning multiple income properties comes with many expenses, whether it is maintenance, taxes, or even marketing; it all costs money! Therefore, you need to find strategies that will help you reduce your property expenses as much as possible. In our previous point, we suggested that you rent out your income properties for long term. If you manage to do so, it will cut on marketing expenses. Remember that every time your property is empty, you have to advertise it, which requires spending some money.
You can also benefit from tax deductions. Check your state’s tax regulations and find out what tax benefits apply to your income properties. Though it won’t be a huge sum of money, you will see the difference in the long term.
Increase rent steadily
First of all, in order to be able to increase the rent, you have to perform real estate market analysis every once in a while. This will help you keep up with the value of your property and its expenses. Stay up-to-date with the rise in costs in order for you to know when you should increase your rent. If you have longer-term tenants, make sure you do that at every lease renewal.
Make sure the fees and rent are paid on time
The whole point of having income properties is making money. You rent out your property and expect to receive income every month. Imagine what would happen if you neglect to collect the rent or any other fees on time. Of course, you are the one to handle the consequences! With this comes choosing the right tenants. The right tenants are a key to your success. The last thing you want is tenants who are always behind on paying the rent and constantly causing damage to your rental property. In this case, you can run a basic background check on them and make sure they are able to pay you on time.
Adding services to your income properties can actually help make some extra money. For instance, you can offer cleaning services to your tenants. You can also add a vending machine for your multi-family home, which will be appreciated by the tenants. Whatever you do, take into consideration not spending too much and making sure that the service is appreciated. Your goal is to make money and not spend your own.
Related: Ways to Make Extra Money from Investment Property
Hire real estate professionals
Now, you should know that managing multiple income properties is not the easiest thing to do. In fact, it could get so overwhelming that you can lose track of where you are standing. Therefore, you should hire real estate professionals to take care of your investment properties. What we are actually saying is that there are plenty of investment management firms for you to hire. These firms will provide you with professionals who are going to take care of all aspects of your income properties. On top of that, they will always look for strategies to maximize the profits produced by your income properties.
Keep in mind that there are different types of real estate investment management. You can either hire professional property management firms which are going to take care of your rental properties’ daily operations. Or you can hire asset management companies which will take care of the whole financial aspect of your income properties, making sure your properties are generating positive cash flow at all times.
When it comes to real estate investing, Mashvisor will give you all the tools you need. Try out our investment property calculator and find out how your income properties are performing. You might as well check out our blogs and learn more about how to make money through investing in real estate.