Being a landlord is a great business to get into for many reasons, the main one being that, with the right plan in place, you can make a good income from the property. However, in order to do this, you need to work out how to maximise your returns and make sure you’re making as much money as possible from your business. The good news is there are a number of different ways you can do this, so keep reading to find out what some of them are; it might be time you put them into practice.
What you can expect in this article:
Set The Right Price
One thing that’s absolutely crucial when it comes to making more money on your rental properties is to set the right price to begin with. Too low and you’ll have plenty of candidates to become tenants, but you won’t be making much profit, and too high and you’ll get few applicants to choose from (if any), meaning you run the risk of having to accept one you wouldn’t normally like in your property.
Make sure you do plenty of market research to understand what the current rents are in your area so that you can fit in with them. Or, if you want to make more money, you can see what can be done to the properties to make them worth more. One idea is to find a retrofit PAS 2035 coordinator to ensure they are as energy-efficient as possible. Tenants will be happier to pay more for a more efficient home because they’ll be comfortable, plus their energy bills will be lower.
Have More Than One Property
Another good way for landlords to make more money is to have more than one property and essentially build up a property portfolio. The more properties you have, the more money you can make, after all.
Having just one property is a dangerous situation to be in because if it’s left empty for a long period of time or you have problem tenants who don’t pay, for example, you’ll be left with no income. If you have more than one property, even if one is an issue, you’ll have others to fall back on. Over time, you can buy more and more properties with the profits you’re making, and that means more rental income and, therefore, more profits.
Screen Tenants Carefully
We’ve mentioned above how problem tenants can cause a major issue when it comes to making money from your property as a landlord. Not only might they not pay their rent, but they could also cause a lot of damage to the property, which you’d need to put right after they left. If they don’t leave of their own accord, you’ll need to start legal proceedings, and that costs money too.
This is the last thing you’ll want (although if you’re a landlord, you’ll need to have a contingency fund just in case this happens – it’s better to have one and not need it than to need one and not have it), but it does happen, which is why good tenant screening is so crucial. Go through the whole process every time you get a new application, even if you think you don’t need to – you never know what information might come to light that will help you choose good tenants rather than bad ones.