5 Tips To Enhance Revenue As A Rental Property Owner
5 Tips To Enhance Revenue As A Rental Property Owner
There are a large number of real estate investors that focus only on rental properties. It is true that flipping houses yields quick monetary returns, however portfolios of well performing rental units are a strong foundation for a wealthy future. These basics will not guarantee success, however they are the building blocks to create a strong well-balanced portfolio.
Step 1: Find Sought-after Areas/Suitable Tenants
Finding well-suited tenants goes hand in hand with finding in demand locations. Depending on the type of tenants you want to attract, location is everything. Keep in mind the desired amenities people want in real estate–nearby recreational and leisure activities, family friendly, within reach of public transportation, close to schools and parks, etc. You’ll never have an issue renting out a property near a college campus. If families are your desired tenants, find properties near schools and parks.
Step 2: With Your List of Neighborhoods, Go Find the Best Value
Finding the best value consists of discovering properties not listed on the market; enabling you to negotiate directly with the homeowner. By doing so, you’ll avoid the fees imposed by real estate agents. Be persistent when bargaining with the homeowner; the price you purchase the property at is crucial in the long run. Even if you’re going to utilize the buyandhold strategy, be mindful of the value.
Step 3: Examine All Methods of Financing the Property
You’ll need to contemplate how much money you’re willing to put down. Choosing a suitable funding plan varies between buyers. Be mindful of the pros and cons of the following financing options:
- FHA loan
- ○ Pro: A low percentage down and an ideal choice for first time property
- ○ Con: The installments of the private mortgage insurance (PMI) will affect your earnings and the price of rent.
- a 2030 percent deposit of the property price.
- ○ Pro: You will refrain from paying the PMI.
- ○ Con: Interest rate will be increased.
- Use cash to fund the property.
○ Pro: Payments will only be made on the homeowners insurance and property tax.
○ Con: Not always feasible.
Step 4: Decide How You Will Advertise Your Rental
The location of your property will determine how often you’ll need to find new renters. For example, near a college campus you’ll need to find new tenants when the school year ends. In this case, advertise months before the school year ends (assuming the renters are students). To promote the property, here are a few ideas: create a website/blog, make a video of the property and share on social media (Twitter, LinkedIn, Facebook, etc.), utilize Craigslist, and promote your property on rental apps.
Step 5: Find Well-suited Tenants
Don’t settle on any prospective client willing to throw cash your way. Determining a suitable tenant goes further than reviewing the application. After all, the more you know about your tenant, the less chance you’ll encounter issues. Here is a checklist to find a suitable tenant:
- Call previous landlords.
- Confirm their employment situation.
Get to know your potential tenants,
- Ask them why they are looking to rent.
- Find out there estimated duration of renting.
- Discuss security deposit choices.
Ultimately, the time you spend researching property and your tenants will make the greatest impact on your success as a rental property owner.