Being a landlord is a great business for many reasons. The most important reason is that with the right plan, you can earn a good income from the property. However, in order to achieve this, you need to figure out how to maximize your returns and ensure that you are making as much money as possible from your business. The good news is that there are several ways to do this. So read on to find out what they are. It might be time to put them into practice.
What awaits you in this article:
If you want to make more money from your rental properties, setting the right price first is absolutely crucial. If the value is too low, you will have many tenant candidates but will not make much profit. If the value is too high, you’ll have few (if any) applicants to choose from, meaning you run the risk of having to accept one you wouldn’t normally want in your property.
Make sure you do extensive market research to determine current rental prices in your area so you can adapt to them. Or if you want to make more money, you can see what can be done to the properties to make them worth more. One idea is to find a retrofittable PAS 2035 coordinator to ensure they are as energy efficient as possible. Tenants will be more willing to pay more for a more efficient home because it will be more comfortable and their energy costs will also be lower.
Another great way for landlords to make more money is to own more than one property and essentially build a real estate portfolio. Because the more properties you have, the more money you can make.
Having just one property is a dangerous situation because, for example, if it sits empty for a long period of time or you have problematic tenants who don’t pay, you will have no income. If you have more than one property, you have others to fall back on, even if one of them presents a problem. Over time, you can use the profits you make to buy more and more properties, resulting in higher rental income and therefore higher profits.
We mentioned above that problem tenants can be a big problem when it comes to making money from your property as a landlord. Not only may they not pay their rent, but they may also cause major damage to the property that you will have to repair immediately after you leave. If they don’t go away on their own, you’ll have to take legal action, and that too costs money.
That’s the last thing you want (although as a landlord you need to have an emergency fund in case this happens – it’s better to have one and not need it than to need one and not have it), but it happens, which is why good tenant screening is so important. Every time you receive a new application, go through the entire process, even if you don’t think it’s necessary – you never know what information will come to light that will help you choose good tenants rather than bad ones.