A Guide to Maximize Rental Property Income
You have just closed on your next home but you haven’t sold your current house. What to do? Should you drop the price and hope for a fast sell? Should you hold tight and get the price that you know is a fair representation of the market. Should you get a new realtor? Should you sell it yourself? All options but the best might be to rent that house. Here are some easy ways to get more rental income. Simple things that require more time than money.
Paint the interior and a Thorough Cleaning
A neutral coat of fresh paint can be the exact thing a dreary room needs to convince a prospective renter. Clean bathroom and kitchen cabinets and counter tops. Bleach the shower/bathtub and make that toilet shine. People are very picky when it comes to hygiene and this is the most important area.
Replace inexpensive things in home
Replace any burned out light bulbs. Check the shower head for calcium buildup and replace. Easily find a high pressure water efficient head for under $10. Check all switches to make sure they are operating perfectly and clean the switch plates.
Heavy Duty Door locks, Deadbolts, security chains and peephole
If looking for a female tenant, security will be a very important factor for most women. All of the above are simple ways to dramatically enhance the security of a house. Most can be done easily and affordable by a homeowner and a prospective tenant will recognize the upgrades as a necessity when they are pointed out.
Hire a property manager
For some a property manager is invaluable. Their cost is a tax deductible expense and it saves the owner from getting involved in any part of the process. No advertising the premises, no collecting rent, no screening tenants, instant access to credit checks, etc., their fee is based on the amount of rent so you are pseudo partners with the same goals.
Run a credit check
Impressions can be deceiving. There is a reason the prospective tenant is renting and not owning and you need to find out. Run a credit check, include it as a cost on the rental application and don’t let anyone negotiate that away. Tell them it is non-negotiable and a term of the rental as well as a subsequent signing of any additional leases in the future. You will immediately know if they have ever been a part of an eviction proceeding or have a track record of civil lawsuits and judgements.
Check references
Get 5 references, hopefully one will be his last landlord. These references are extremely important as they show he is not a transient but has roots in the community. The time spent can save you thousands of dollars in unpaid rent, Marshall fees, court fees and aggravation if you rent to the wrong person and you need to evict.
Hire a Certified Public Accountant
A C.P.A. will be able to help you offset profits and losses made on a house. Complications are normal when you are a landlord. Taxes have to be calculated using complex formulas of depreciation, profits, losses, maintenance and expenses.
Treating a rental as a business is the mindset you need to be a profitable landlord. Most people fail as they don’t have a business plan and treat the rental as a hobby investment.
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