Landlords – Tips to Get More Money for Your Space
Guest post from by Steve Brown and PropertyTurkey.com!
Recent discoveries in real estate are becoming quite challenging for landlords. For the first time in nearly a decade, vacancy rates are going through a significant increase. This has happened due to a growing number of empty properties. Even though in the last quarter they merely rose by 0.1%, it is worrying since empty units are a landlord’s biggest profit pool. However, it is reassuring that an increased supply doesn’t affect the amount of rents, which by the way, continue to increase due to newly built apartments and homes. Savvy, informed landlords know that the time to act is now. They must secure their profits as soon as possible, and be sure that as the economy recovers, they are protected from home ownership rates and high vacancies. Landlords should adhere to the following tips and guidelines to get more money from their properties and maximize profit.
Stay competitive while increasing the rent
If the price a landlord asks for a unit is too low, he will surely rent it immediately. However, this could lead to significant losses in rent money. It is important to make sure that the revenue vs. cost amount is calculated correctly. Otherwise, you’ll end up losing cash rather than seeing a return on your investment. One of the best price influencer is location. But then again, to maximize rental income it is equally important to make sure the property on the market features an updated décor and is in good condition too. Stay up to date with recent market rates and changes by keeping an eye on Zillow and Craigslist.
Be wise, not smart
Advanced technology offers landlords a lot of opportunities to avoid a property management overhead. Cozy for example, is an extremely useful platform. It offers both tenants and landlords easy-to-use end-to-end management software for rentals. Cozy can decrease the amount of time required to collect applications, collect rents and screen tenants. The tools provide a better user experience by making rent collecting an automated process. Users of Cozy can upload videos of their spaces and properties on Vimeo or YouTube, and then have their application connect to the videos annually.
Benefit from tax breaks
To make the most of your rental property you should know everything there is to know about allowable expenses. This way, you’ll be able to reduce taxable profits and eventually, your tax bill. Landlords are at liberty to claim repair and maintenance cost on all their current properties. Making sure properties are in good condition allows landlords to ask for better rental prices, thus turning this situation into a win-win.
Furthermore, it is also possible to deduct the interest on your mortgage, and additional costs implicated when you purchased the properties. However, all costs involved when buying property can be deduced in 12 months. There’s an annual depreciation process you need to abide by as property is considered an asset, just like cars. As opposite to other assets you might own, real estate (rental units in particular) increase in value with time. In terms of additional deductible expenses you might want to consider, we should also mention business-related travel, insurance, home office expenses, and contractors.
Choosing tenants wisely
To make the most of your property, you need to choose tenants properly. The right tenant should be a responsible individual who understand the importance of proper maintenance. This will save you a lot of cash as in the long term fixtures costs are reduced to a minimum. Hunt the market for ideal tenants, and target people that actually want to live in a place that looks and feels comfortable. For example, if your favorite tenant-type is a business professional in his 20s, then he will appreciate a cozy, minimalistic décor. However, retirees or families with kids might not be that happy a luxurious interior décor because they prefer viability over luxury.
Last but not least, don’t forget that location is also a fundamental factor when buying property for rent. Have realistic expectations about your space and decorate it by taking into account the kind of people that live nearby. If you buy property near major universities and college campuses, don’t put a lot of money into the décor as tenants will probably be students who won’t be staying for more than a few months.
By Steve Brown and PropertyTurkey.com
Get your small business organized with our all-in-one solutions for iOS and Mac.