If you are considering investing in real estate or you already own a rental property, knowing how to properly manage your property is essential for success. Housing sales are booming at the moment, making it the perfect time to buy into the market or reconsider your current practices to increase your profit.
Below are four suggestions for getting started, maximizing your rental earnings, and increasing your property’s value.
If you are looking to purchase a rental property, get ahead of potential problems by doing your research and choosing the best possible property. Depending on which type of rental you are seeking—either a short-term vacation property or a long-term residential property—you will have to consider a few location-based qualifiers before deciding to buy.
For vacation properties, you will want to be close to the action. Choose a property that is central to all of the local attractions, potentially eliminating the need for transportation. For residential properties, consider the crime rate, school system, job market, and rental laws of the area the property is located in. For either type, ensure that the building is structurally sound without any major safety concerns or potential big-ticket fixes.
While it may be tempting to pick up a less expensive place and get started right away, ensuring that your property has inherent value will make this process much easier on you later on and give you more potential for growth.
While many landlords hire professionals to handle the maintenance of their rental properties, you can save a lot of money and develop some useful skills by doing as much work as possible yourself. Many issues that renters report will be mundane things that could be resolved without the help of a professional, such as minor plumbing problems, broken fixtures, and quick replacements.
Managing these tasks on your own will help you cut costs and learn some practical skills, but it will also help you develop a positive relationship with your renters. If they know that they can rely on you to help them out or solve their problems, they will be much more likely to comply with your rules and requests.
To increase your property’s value, you can also add more features that improve your renters’ experience. For example, you may want to consider supplying internet and television services as additional utilities. If you provide services like this, you may be able to justify a rent increase and allow renters to simplify the payments that they are making to different providers.
If your property holds multiple smaller units, there are even more amenities that you can include in your rent fees. For instance, you can include fees for specified parking spots and extra storage space into your renters’ payments. Renters will likely appreciate having these amenities secured, making your property a competitive option as they search for rentals.
One of the best ways to ensure that you are making the right moves to make money is to compare your processes, properties, and fees with those of other landlords in the area. If your area has tons of vacancies or your rent is significantly higher with fewer benefits than other local options, your rental business may suffer.
For short-term rentals, a comparison might be a little harder. Since vacation renters come and go all the time, it can be hard for individual landlords to determine patterns. To simplify the process, you can estimate potential earnings with an Airbnb revenue calculator to get a better understanding of the market in your chosen area. If you aren’t happy with your rental’s performance prediction, you can adjust your methods or invest in a property in a different area that could support your plan.
Real estate investment can be tricky, but with research and proper management, your rental property could be more profitable than you’d ever imagine. Follow these suggestions as you consider purchasing new properties and rework your current plan for better success.