The ultimate goal of any real estate investor is to make money. There are various types of real estate investments which give you the possibility to become rich, and the most popular among them is buy and rent. In rental properties, a real estate investor makes money through the rental income. The higher the rental income, the more money an investor makes. That’s why every investment property owner is constantly in search of ways to boost his/her rental income to make more money in his/her real estate investment business. So, let’s take a look at the best strategies to raise your rental income:
Related: How much rental income should you be making?
1. Improve your investment property
Of course, the most straightforward answer to the question “How can I boost my rental income as a real estate investor?” is “By buying a new rental property”. However, obviously, buying a new investment property costs money, which you probably don’t have at your disposal for most of the time. But that doesn’t mean you should get desperate that there is no way to make more money as an investor. Actually, there are ways to boost your rental income from your existing investment property. Just do some fixes and repairs that will cost you little but will make your income property look more luxurious. Improve the kitchen or the bathrooms or add some amenities to try to rent out your real estate property as a luxury rental. Then you can charge higher rent to your tenants, which will automatically increase your rental income. That’s a smart way to increase the rent because you will actually start offering something more than before. To make your tenants feel good about it, you should ask them what fixes and additions they would find most needed and rewarding.
2. Split into two
Once again, having more investment properties is the best way to increase your rental income. One trick to become an owner of two rentals instead of one income property without having to take a mortgage from the bank is to sell your bigger, more luxury property and buy two smaller, less fancy ones with the money from the sale. It is absolutely feasible to do that as you will be able to charge more rent on two rental properties regardless of the fact that they will be smaller in size. However, to make sure that you will actually land at better rental income, you have to conduct careful real estate market analysis as well as investment property analysis. Using a rental property calculator will be of great help in these endeavors. To get access to the best investment property calculator there is at the market, sign up for Mashvisor. It will save you tons of money, energy, and time by doing all the necessary analysis and calculations for you, based on traditional and predictive analytics.
3. Relocate your rental
Another way to boost your rental income without spending a few hundred thousand dollars on a new investment property is by relocating your income property. Obviously, you cannot just take your income property and move it to a new location, but you can sell your existing rental property and buy another one in a new location. Out-of-state real estate investing is sometimes a great way of making more money through investment properties, especially if you live in an overcrowded and overpriced housing market. Thus, consider this option when thinking of how to raise your rental income. Again, you will need to perform real estate market analysis to make sure that you can buy a new real estate property which costs approximately the same as your current one but will be able to generate you more rental income. Mashvisor’s investment property calculator will do all the work for you for available properties across the US.
Related: 6 Reasons Why Income Property Location Is So Important in Real Estate Investing
4. Try out Airbnb
Sometimes there is no need to increase the number of your rental properties or to get a new income property in order to start making more rental income. Sometimes all you need to do to increase your profitability (rental income, cash flow, CoC return, cap rate) is to alter your rental strategy. While traditional rentals can be great, in many occasions Airbnb investment properties turn out to make more money for real estate investors. Thus, if you want to boost your rental income from your existing rental, do investment property analysis to check whether switching to Airbnb could do that for you. After all, there is a reason why the Airbnb rental business has been growing at such a fast pace in recent years.
5. Find better tenants
When owning and renting out an income property, one of the main determinants of your rental income and cash flow is your tenants. While you should be careful not to discriminate against any applicants, you should choose your tenants very carefully as your money will depend on them. It is true that you would charge any tenant the same rent, but some tenants will cause so much damage to your rental property that they are just not worth the trouble. Do diligent screening to choose the best tenants as this will minimize the need to do major repairs and fixes on your property, and your cash flow will be always positive and always higher.
Related: How to Pick the Perfect Tenant from Multiple Applications
6. Make use of tax deductions
One of the great things about investing in real estate properties is that you can take advantage of various types of tax breaks and tax deductions. If you want to start making more money from your rental property, make sure that you apply all tax benefits for which you qualify. Even if you don’t end up increasing your rental income directly in this way, at least you will pay less tax, which means your expenses will go down, and you will end up with more positive cash flow. And that means more money in your pocket or in your bank account.
To learn how to be an even better real estate investor and landlord and how to make more rental income to increase your profitability, follow the top 6 strategies listed above. And remember to check out Mashvisor regularly for more practical advice on your real estate investment business.