So you’re looking to earn a little passive income on the side with a couple of rental properties on the side? As a landlord, what are the best ways to make more money on your rental properties? Let’s take a look
- Try to reduce vacancies as much as possible
A vacancy is when no one is occupying your rental property. This means you are not making any money. The best way to minimize vacancy is to find a long-term tenant. But this doesn’t always work out as they might want to move to another part of the country or buy a house. So to reduce the turnover time it is imperative that you as a landlord find someone to replace them. You can do this by immediately advertising the property when your old tenant gives you the notice of leave. If you do not worry about the turnover time you could be potentially be losing 8.3% of your annual revenue every month of vacancy.
- Minimising Turnover as much as possible
Turnover means worrying about advertising, repainting the property, fixing the floors and pipes etc. That could all be money going straight into your pocket if you try to minimise tenants moving out frequently. You should try to find tenants who take care of your property and pay consistently. You should also try to maintain a good rapport with your tenants and tend to their problems as much as you can. The longer and happier they are, the happier and richer you are.
- Extra Services cost extra money
This is a great and innovative way to add some extra money to your cash flow. If you own a housing complex with multiple tenants, you could try putting up a vending machine or a laundry service in a common area. If one of your tenants want something fixed, call up the required personnel and charge a contractor’s fee. Try to add other convenience services like dry cleaning, babysitting, etc. to add multiple revenue streams from your property. Tenants usually will pay up to avoid the responsibility themselves so use that to your advantage as much as possible.
Usually, one needs to take out a loan from the bank to buy a house. The bank will then give you the amortization schedule of the loan which is the schedule of payments needed to pay off the loan. If you have identified the costs involved in renting out your property correctly then it is possible to pay off the loan with the rent you get every month. This would mean you would not have to worry about the loan and it would get paid off in due time. This is assuming you do not need that cash flow from the rent.
- Don’t be a pushover when it comes to late fees
The most common problem landlords have are tenants not paying their rent on time. It is important to be friendly and kind to your tenants but it is also important that you are diligent. If your tenants do not pay their rents on time, do not be afraid to ask for late fees. At the end of the day, your tenants signed a contract. Complete your side of the transaction according to the contract. If you let tenants do whatever they want, it will end up hurting you in the long run.