Your rental property is a source of income; just like any other income source, you want to make sure you’re maximizing your profits. There are several tried and tested ways that you can increase what you can charge for your rental property. A few obvious ones are to add extra space by way of extensions and renovations. However, here are six ways to get the most from the rental property you may have overlooked.
Reduce Time Left Vacant
A property without a tenant will start to cost you money. For each day you don’t have people in there, you will have to foot the cost of the utilities, upkeep, and more. Include in your rental contract that tenants must give you 30-day notice before leaving your property; this should give you enough time to find new occupants.
To decrease the turnaround time, the day the current tenants leave should be the day you have the keys back in your hand.You can head in, clean the property, assess repairs, and have the new tenants in within a few days.
Hire A Property Manager
A property management company will cost you money, but if you use them right they will make you more money than they cost, making it a positive spend in terms of investments. They will take a small percentage of your rental income in exchange for their property management expertise. They will be able to tell you how much you should charge, take care of tenant searching, provide a personal showing assistant, conduct move-in and move-out inspections complete with videos and photos, and more.
Add Extra Fees for Pets
Many landlords won’t entertain the idea of pets because of the wear and tear that they often have on a living space. Yet, if you increase the rental price or add on a monthly fee per pet, many people with pets will be happy to pay for it. The increase in the rent can cover any damages and a deep clean at the end of the tenancy.
Add More Amenities
The more a rental space has to offer, the more money it can command. Most people who rent will be happy to pay a higher monthly rent if, for example, they don’t have to fully furnish a rental property. Including appliances like a washer and dryer, a refrigerator, and a dishwasher. If your circumstances allow, consider including membership to a local pool or gym, energy-efficient features, and private outdoor space.
Don’t Include Utilities in Monthly Rent
This can be an expensive mistake. If you include all bills in the rental cost, but the energy prices rise, or the tenants use an excessive amount of gas or electricity, then you will need to cover the excess. This will drastically reduce your margins.
When the utilities aren’t included in the price, the tenant will be more careful about how much they use because they will be covering the bills. When tenants aren’t covering the cost for something, they will typically use more of it. Longer showers, more heating, etc. will cause a spike in utility bills.
Make Use of Tax Breaks
There is a wide range of tax breaks that landlords can take advantage of. Here are five ways that you, as a landlord, can make use of your tax breaks and get the most from your rental properties. You can claim property tax. Depending on your state, if you manage short-term rentals, they may charge a fee known as occupancy taxes.
Just like your sales tax, you can deduct occupancy taxes too. You can also deduct the loan interest on your mortgage. This doesn’t mean you can deduct the portion of your mortgage payment that goes towards paying the principal loan amount; instead, this is just for the charges of interest.
If there are maintenance and repairs that need to be done on the home, and you hire someone to do this for you, you can deduct these maintenance and repair costs. Any form of insurance will be considered an ordinary and necessary rental property expense, and this means it is deductible.
As a property owner, you are allowed to deduct certain professional fees that relate to the rental property. If you use a lawyer, computing software to prepare your tax returns, or anything similar it can be considered in operating expenses and can be deducted.
For help getting the most from your rental property, get in touch with Amanica today.