Do you have a rental property, or a couple of dozen, and you want to maximize the return on your investment? While a decent income from renting a house out to reliable tenant is good enough for many, some take being a landlord more seriously. If you want to build a serious retirement income from your properties, or want to get more money for your real estate, read the below guide.
Research the Rental Property Market
Knowing where it is worth investing, and which home designs are the best for each market segment is essential if you have rental properties. You need to choose homes that appeal to working couples, single people, or families. Take into consideration the neighborhood, the future investments in the area, and the market trends. You can get help from your local estate agent, or a property expert, and this way you can make the right location choices for the future.
Find Your Ideal Tenant
Before you put your rental real estate on the market, you will need to find out which type of person it appeals to. Ideally, you want a couple who are working, or a couple with kids, with at least one full time income. This way, you can be assured that the tenants will stay in the house for a longer period, and you don’t have to spend a fortune on renovation and agent fees. If you are targeting retired people, make adjustments to the property that appeal to them, such as easy access and downstairs toilet.
Learn the Legal Terms
No matter how well you read the letting agreement put in front of you, you might only understand half of the terms. To make sure you are happy with everything, you should either seek legal advice, or study the terminology. You don’t want to lose money because you didn’t fully understand the small print.
Invest to Add Value
To maximize the profits on each rental property you have, you need to carefully think about your investments. Add an extension to increase your rent in the future, or improve the bathroom to maintain the resale value of the real estate. Focus on renovation projects that are likely to impress potential tenants, as well as future buyers.
Learn the Trade
If you want to be an expert and make a full time income of your property portfolio, you might sign up for a RETS course to improve your knowledge. You might also embark on a self-study course, and learn as much as possible about tenancy agreements, homeowner responsibilities, insurance, and dealing with emergencies as possible. Nobody was born a real estate guru, and you will need to invest in your learning to maximize your profits.
If you make money on rental property and are looking for new ways of increasing your profits, you will need to learn the trade. Make clever investments, learn everything about contracts and your target market, and study the potential locations for your next purchase. Focus on increasing both the resale and rental value of your real estate portfolio, and you will succeed.