Investing in a rental property might pay you financially. Be aware of the hazards and obligations if you’re considering this type of real estate as an investment.
While a property used to generate a consistent rental income may be appealing, the income’s consistency is dependent on several things, ranging from a decent renter to the best use of web technologies. In today’s fast-paced, competitive real estate market, having an internet presence is critical for long-term survival. Real estate portals and social media platforms not only let you access a larger audience but also help you earn higher rental rates. Furthermore, having a talent for negotiating and good communication skills will help you strike a profitable bargain.
Tips to improve your rental income
Here are a few clever strategies for increasing your rental income.
- Conduct market research and price your product suitably
When I first started investing in real estate, one of the biggest beginner mistakes I did was undervaluing my rental properties. My thought process was as follows: I’d prefer to rent the house as soon as possible, and pricing it more competitively will provide me with a larger pool of potential tenants from whom to choose.
When it comes to filling the vacancy, the most important point to address is the rental rates, since both sides want to get the best deal possible. As a result, while looking for a new tenant, be clear about your price expectations ahead of time and convey them to the other party promptly. This will save you from squandering time on ineffective leads.
Furthermore, keeping the rent just below the hundreds is a psychological gimmick. For example, Rs 9,999 per month appears to be more appealing than Rs 10,000 per month. Furthermore, it is preferable to quote a higher price because the amount will only decrease after talks.
- Perform a thorough tenant screening
Spend an hour or two contacting previous landlords and other references, running a credit report, and otherwise completing your due homework before agreeing to rent to a tenant. This is why: An eviction costs the average landlord thousands of dollars in legal fees, repair charges, cleaning bills, and other expenses, in addition to the loss of rent for a few months. Avoiding instances where tenants don’t pay is one of the best ways to maximize your rental property income, and thoroughly screening your tenants can help you achieve so.
- Hire a (good) property manager
You might think of a property manager as an expense as they charge you 10% of your rental income. However is it true? The answer is no. Hiring a good property manager such as Assetmonk is a good practice to earn higher rentals. A good property manager will carry out all the necessary research and evaluation works for you. They can help quote the best price on your property and also recommend tips to increase your rental income. They will help you in maintaining your property and also help in finding good tenants after conducting proper tenant screening. Thus, the property manager is not an expense, but one of the best practices to adopt for better and higher rental income.
- Make use of Tax Breaks
It’s no small task to renovate your home before placing it on the market for rent, but it’s a necessary step to increase your rental income. Simple: it allows you to charge a greater rent. Nonetheless, it costs you a significant amount of time, effort, and, of course, money. So, to minimize your overall spending, make sure you take advantage of tax savings. Include all charges of repairs and maintenance on your property, as well as insurance, the cost of employing a contractor, and any business-related travel.
- Technology and social media usage
Make liberal use of social media to advertise your property in addition to internet real estate portals. This aids in the reduction of vacant time and the acquisition of fresh leads. A well-written listing and competitive pricing can help the property stand out from the throng. For potential flat owners and homebuyers, there are various localized clubs. You may join such groups on a variety of platforms, including Facebook, Instagram, and Whatsapp.
Furthermore, encourage online payments to keep track of the rent schedule and payment history. This can help in saving time and effort for both parties. For online fund transfers, you can use the Unified Payment Interface (UPI) and Net banking.
Some psychological tactics, in addition to the preceding hacks, may be effective in converting a lead. Place some temporary furniture in the room to prevent it from looking empty, or attempt to add a personal touch by hanging a painting on a blank wall. It will assist the potential tenant in visualizing himself as a resident of the property. Last but not least, a spotless premise is less likely to be rented than one that has been dusted and cleaned.
This is by no means an exhaustive list, and there are many additional ways to boost the earning potential of your property. If your home is in a city, for example, adding security features like an alarm system or a doorbell camera could add a lot of value. You might be amazed at how much you can increase your rental income by thinking about what your target set of tenants might want and providing it for them. Assetmonk is India’s largest WealthTech platform, with properties in Bangalore, Hyderabad, and Chennai specializing in real estate investments. Our investors frequently praise the quality of our services and products. To learn more, come visit our website.
Good and Bad Practises That Affect The Rental Income Of Your Property FAQ’S:
Do some market research and set reasonable pricing. Make sure to thoroughly vet your tenants. Employ a (decent) property manager. Consider renting for shorter periods, add washing facilities, and so on to boost your rental income.
In most markets, a variety of factors influence rental values. Interest rates, inflation, affordability, infrastructure, government taxes, and supply and demand are among them.
A condition in most leases and rental agreements prohibits a tenant from making modifications or alterations to a rental property without first obtaining the landlord’s written authorization. If you make an improvement or alteration without the landlord’s permission, it usually becomes the landlord’s property when you leave.