A rental property is the best form of investment as it is a steady passive income source. Moreover, you can always sell it at a premium in the future. However, the primary concern should be to make the most of the place at present. The rental value depends on several factors, such as the location, neighborhood amenities, size, and features of a house. While these factors are uncontrollable, you can do your bit to earn more. Let us share some actionable tips to maximize the rental potential of your property.
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Research rents and update periodically
A simple way to maximize the rental potential of your property is by researching rents and updating your price periodically. You must definitely do it every time you get a new tenant. Check the rental market in your area by researching the listings for similar units in the neighborhood. Renting out during summer is a good idea because it is the peak season when demand skyrockets and prices increase. Besides keeping pace with the market trends, you must update every time you add value to your property with renovations, additional features, replacements, or improvements.
Keep the property in good shape
This one is a no-brainer because any tenant will be happy to shell out more for a place in great shape. Taking care of your property may initially cost you money, but it is worthwhile. Conduct a proactive inspection and make necessary repairs before listing the place for rent. Likewise, doing preventative maintenance is critical. You can pick small renovation projects such as replacing old flooring, switching outdated appliances, and landscaping to increase the rental potential. The good thing about investing in maintenance is that it encourages your tenants to follow suit. Ensuring adherence to building codes should be a part of the maintenance task as it minimizes the risk of injury and lawsuits.
Leverage technology for property management
Besides good maintenance, you must go the extra mile with management to increase the rental potential of your place. But it can be a lot of work because it includes listing, tenant screening, maintenance coordination, tenant communication, rent collection, accounting, and more. Managing everything sounds tricky, but not everyone can afford a dedicated property manager. However, you can leverage technology with property management software solutions to cover all fronts. Looking for one with a mobile app interface is an even better idea because it lets you manage your property on the go.
Go the extra mile with rental paperwork
A robust rental agreement is a crucial aspect when it comes to managing your financial expectations as a landlord. You must have one in writing and include a proper clause to mention the annual increment in rent so that it grows every year. It should also include the basics, such as tenant information, agreement date, rent price, and specific rules. The best thing about a written agreement is that it prevents expensive legal battles in the long run. The tenant has a clear understanding of their obligations and potential penalties for delaying or missing out on a payment. Avoid verbal agreements because they elevate legal risks down the line.
Prioritize good tenants
Holding onto good tenants is a wise way to maximize profits. Start by screening them from the outset to ensure good ones. Consider factors like timely payments and ensuring the optimal condition of the place to judge whether the tenant is worth keeping. Renewing your lease with such tenants enables you to save time and money. You need not stress about going through the entire process of listing, screening, documentation, and turnover tasks again. Conversely, you must get rid of bad tenants as soon as possible because they bring the risk of damage to your property, missed and delayed payments, legal trouble, and eviction.
Treat your property like a business
The best piece of advice for landlords is to treat their property like a business. Remember that you want to earn profits from it, increase its value over time, and protect it, just like a commercial business. You must follow the basics, such as maintaining clean accounts, paying taxes on time, knowing your state laws, and keeping digital copies of all paperwork. Also, deal with your tenants professionally by setting clear rules and penalties. You must also do your bit by answering emails, calls, and maintenance requests on time. Treating your rental property like a business enables you to maximize your profits because you make your tenants happy by handling things seamlessly, managing your finances well, and avoiding legal battles.
Maximizing the rental potential of your property takes a strategic approach. You must choose your tenants wisely, stay ahead of the paperwork, and keep the place in great shape. Most importantly, remember that your rental investment is a business, so you should manage it like one.