Wait a minute, you’re finding that your rental income is not reaching its potential worth. A quick link to Mashvisor’s rental property calculator offers an estimate of the potential money that could be making from your real estate investment property in the form of rental income. The rental property calculator will generate a base figure for the minimum amount of money that can be made through the rental property as is. A little renovation can drastically increase that number.
It’s time to figure out what is keeping your rental income down. The first priority that every landlord should have is to ensure high tenant occupancy and mitigate the risk of vacancy. As a landlord, you must take pride in your income property. Any landlord can gain financial security as well as a steady source of income through a real estate investment property. It is necessary to have a rental strategy in mind before beginning to rent your the real estate property. What can you do to make your business more lucrative to potential tenants? What kind of tenants are you looking to attract? How much work are you willing to spend on the house in terms of maintenance and upkeep? These are some of the few questions to keep in mind when trying to increase your rental income.
Related: How much rental income should you be making?
The location and size of your rental property are fixed, but that doesn’t mean your income has to be. There are a few factors to consider before gaining financial independence through your rental income. Here is a list of the top 6 factors that are keeping your rental income low.
The number one advice that is given to real estate investors is to focus on location, location, location. There is a strong correlation between the amount of rental income your rental property will generate and the amenities that surround it. It’s pretty obvious that tenants are willing to spend more money on rent based on the convenience of the location. It’s important to look for places with amenities like grocery stores, malls, bus routes, good schools (for families), parks, highway access, etc. These minor details can drastically increase how much you can charge tenants for their rent.
First impressions last a lifetime. Hence, it is important to have the front of your rental property look presentable for potential tenants’ viewing the house. This means that the grass is cut, the flower bed is nicely made, the front door is painted, the mailbox is upright and clean. Little changes to the appearance of the investment property can leave a lasting impression making the tenants want to pay more to live in your property.
Attracting the right tenants
You now have your rental income. It’s essential to think of what kind of tenants are going to occupy your rental property. The largest expense to any landlord is dealing with destructive tenants. For one you have to go through the eviction process, and two it will also increase your potential overhead expenses. Making the investment property look physically appealing will attract a wider range of potential tenants. It is now up to you, as the real estate investor, to show the future tenants the potential of your income property. By selecting a prime location and enhancing the appearance of the home, you are able to select your tenants wisely. Having the rental property in an excellent living condition is the first step to start a successful investment property business.
Related: How passive is your rental income?
Supply and demand
Vacancies are the costliest expense to a landlord. When renting out an investment property, it is best to advertise the rental property as much as possible. This includes a sign on the front yard as well as online sources such as home rental websites. More buzz can increase the demand for the rental property and allow you to charge more rent which will automatically translate into a higher rental income, putting more money in your pockets.
Now that the outside of the rental property looks good, it’s important to maintain the perception of the house. A few alterations to the kitchen can warm the room up and make the future tenant feel more comfortable. Changes may include an upgrade to the countertops and the cabinets as well as a new appliance. Painting the walls and filling the holes in the walls can also increase the rental income. Consider painting the rooms in a light color, it will give the impression that the room is bigger in size. New windows in replacement of the old worn out windows can improve the appearance of the rental property too. This fix can be very beneficial in a few ways. One: the tenant will be willing to pay a higher rent knowing that everything in the house is in great condition. Two: it will lower your overhead costs. These can be minor changes that can make a major difference in the rental income you make from this investment property.
Money grabbing conditions
A good idea for a landlord is to realize where extra money can be made. A lot of rental properties are not pet friendly. By making your investment property pet friendly, you can ask to increase the rent as liability to any damages that pets may create. Offering weekly landscaping fees for an increase in the rental income is another great option to consider. Taking 20 minutes out of your week to cut the lawn can increase the rental income too. This can be further beneficial as it allows more communicate between the tenants and the landlord, and extra communication means that the rental property remains in a good condition.
Related: 3 Ways to Sustain Your Rental Income
A good landlord knows that the goal to any successful rental property is to demonstrate to the tenant all the positives that the house has. When a tenant commits to renting a new home, he/she must be able to visualize him/herself living in that place. This means to create a comfortable and safe haven to escape to after a long day at work. An income property that is nicely put together will attract tenants that are respectful to your income investment. When starting your investment business on the right foot, you will be able to make the right rental income right away. The real estate investing business can bring on a passive income. Starting the business with hard work and effort will allow the rental property to be less hands on when it is occupied. Its noteworthy to know who your target tenants are when investing in a rental property to try to cater to their needs. For any more questions related to real estate investing, visit Mashvisor for all the answers you need!