The residential real estate market is ever-changing and it is crucial for maintaining tenant satisfaction and to keep your real estate investment profitable, no matter if you have one rental property or several. Maximizing your rental income is another step in the direction towards financial freedom.
How to get the most out of your rental property
The following tips will help you maximize your rental income while securing your tenants’ happiness and attracting future residents. It’s a win-win for everyone!
Know your market.
Before you decide how much rent to charge your tenants, you need to research current market rates. Pricing your home appropriately will result in a higher probability of a better tenant, and will help you lease your property faster. You can use popular platforms such as Zillow, Zumper, Trulia, and Facebook Marketplace. Dig into your local market and use property characteristic filters to find properties that are similar to yours. The more specific you are, the better.
Pets are a residents’ best friend.
Nowadays, it is a necessity to allow pets in rental properties, especially single-family homes. According to the World Population Review, almost 60% of Iowa residents have a pet in their families. This will give you an opportunity to profit and raise your monthly rental income.
You can put your own restrictions in place as far as the size of the pet, how many you will allow at one property, and potential breed restrictions. Some renters insurance companies have a list of restricted breeds you can follow if you see fit.
Pet fees will not detract people from wanting to rent from you – in fact, it is more attractive to potential tenants because they see that you do allow pets. One-time pet fees, refundable pet deposits, and monthly pet rent to help pay for normal wear and tear as well as any pet-related maintenance you may need when the tenant moves out.
One-time pet fees range from $50-$100 and are usually due the same time as the pet deposit, which range from $100-$200. The monthly pet rent can be arranged on a case-by-case basis – the bigger the pet, the more the monthly rate. Current market trends suggest $30-$55 a month for furry friends.
Options, options, options.
Tenants need flexible leases for multiple reasons. As a landlord this can seem daunting, but these short-term leases can actually benefit you.
Offer short-term leases to attract prospective tenants. People need short-term housing solutions for several reasons like a job change, moving from one state to another, etc. It is important to offer a mixture of solutions to potential tenants? problems.
However, you will want to initiate a minimum leasing agreement; start with three months, then give your tenant the ability to pay month to month. Be reasonable with your charges and termination period. Since your tenant wants to go month to month, allow them to give you a longer notification period, 45-60 days. To mitigate what you may see as a financial risk, try charging a short-term premium rent that is higher than your long-term rent. A solid base rent for short term leases are typically $100-$300 more a month.
Minimize turnover expenses.
To reduce turnover costs, make sure that you screen your tenants appropriately. Skimping out on screening may cost you thousands of dollars in the end – make sure your tenants are up to par and have a good track record when it comes to paying the bills on time. You should also make sure that your rent is attainable.
There are some costs that are unavoidable if a tenant decides to move out, such as: Touch ups and property upgrades, and catching up on deferred maintenance. Give your tenant the responsibility of cleaning the carpets and deep cleaning the property, or offer to take care of it for them for an additional cost.
In addition, you will have to maintain the utility lines and ensure the property is clean between showings. These expenses can add up while your property is vacant.
Your property deserves some TLC.
Keeping your property in good condition can help you minimize turnovers. It is a continuous process that will maximize your property’s income. You will need to stay on top of the current market trends. What do similar properties have that you do not? Spend your allowance smartly; a Bluetooth refrigerator may not be in your best interest. What are popular color schemes, appliances, and energy-efficient gadgets that make sense for your property? You want to be the driving force of the market’s changes, not the follower.
Maximize your rental income.
A few of these items on the list can be a one-time adjustment, but others must be done continuously. You must research rent prices and guarantee your property is in good condition in order to boost your property’s rent and keep your tenants from moving on to avoid those turnover fees. The happier your tenants are, the more likely they are to give a good review, recommend you to others, or continue renting from you. Implement these five tips to help maximize your rent and stay on top of the market changes.