It’s a great choice to invest in a rental property if you want to generate daily income and establish equity in a comparatively safe and effortless manner. There are a lot of ways for real estate investors to see notable returns on their investment, particularly with the proper know-how and a careful eye.
When it comes to real estate, the profit has no limit. This is why there are plenty of real estate tycoons who have made it to Forbes’ list of the richest men last year. In this article, we’re going to discuss how you can make the most of your profit from your real estate investment.
1. Raising the Rent
This is probably the most obvious way you can increase your profits from your investment properties. When you increase your rent, you are keeping your property priced inside market value which helps you to remain on top of expenses and provide you with ways to achieve profitable rates on your properties.
However, you want to make sure that you don’t out-price your tenants that can lead to a vacancy. The best way to offer an approachable rent increase is to establish regular rent increases into your lease contract. By having a little yearly rent increase into your lease contract, your tenants can prepare for the increase in living costs and budget suitably.
2. Upgrade Your Properties
Successful real estate investors don’t think that upgrading their properties will eat up their profit. Instead, they consider it as a form of investment also that can bring your more money in the long run. Thus, don’t be negative about upgrading your properties that may involve renovations such as adding a patio, installing a new garage door, or fortifying the attic insulation.
All of these renovations you are doing will make a profit from a financial perspective because they raise the valuation of your properties.
3. Offer Additional Utilities and Services
Do you own a triplex, fourplex, or multifamily property? Then you might want to consider maximizing your profits through an operated laundry. This is a great way for earning more if the property does not provide an in-unit washer and dryer. Having onsite laundry provisions can turn your property into a more appealing one by giving you added bonuses and more income every month.
You can have options to hire machines through major appliance companies, but the profits will be split and maintenance is handled by the company. Or you can buy the machines and keep 100% of the profits, while also dealing with the maintenance. Don’t forget about the water costs in your neighbourhood and access to other local laundry services to ensure that having an onsite laundry will work best for your tenants.
4. Make Your Property Investment a Pet-Friendly One
This actually works since pet-friendly housing can be difficult to find. As a real estate investor, you can use this opportunity to capitalize on this need for pet-friendly properties by allowing tenants to live with their pets. Of course, this must include well-established rules and an increased amount in rent.
You may consider charging a monthly fee for the pet rent if your renter wants to have a pet on the property. This is a simple additional income for your property. If the pet brings damage, you may still get the required amount for repairs out of the security deposit.
Take note that emotional support animals and service animals are not considered pets and it’s prohibited to charge pet rent or additional feels to tenants who have these types of animals.
5. Don’t Hesitate to Ask Help From Professionals
Even if you and your renter try your best efforts to stay on top of daily tasks, there will always be circumstances where you need to hire a professional to fix some issues in the property. This is why it’s important to choose the right contractors and vendors that are available to help you maintain the costs down when a maintenance issue comes out unexpectedly. Make sure that you establish a great relationship with electricians, painters, plumbers, and other things related to home vendors as they can provide you quick access to quality services when you need them.
If your tenant contacts you with a maintenance emergency, you already know who to call and you’ll receive the proper service at a price you are ready to pay for. It’s difficult to call around trying to look for someone based on their availability to fix an emergency, and this is where maintenance usually gets very expensive.
6. Claim a Rental Property Depreciation
Not all real estate investors are aware of this important tool. Rental property depreciation gives investors the opportunity to reduce the costs from their taxes of purchasing and improving a property over its useful life or 27.5 years.
There are plenty of free depreciation calculators available online that you can use to check your depreciation rates. Therefore, this lowers their taxable income in the process which can maximize their profit in real estate property investments.
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