Maximizing Rental Income

Maximizing Rental Income

If you are looking for ways to maximize your rental income, you will be happy to know that there are several simple steps that you can take. In fact, here are the three biggest steps you can take to help get the most out of your rental property.

Step #1: Use a Property Management System

Utilizing a property management system is one of the best ways to maximize your rental income. Rental management software, for example, can help you with collecting applications from potential renters, screening tenants and collecting rent. In essence, this software allows you to “set it and forget it” as it automatically collects rent and performs other routine functions.

Of course, being a successful landlord with satisfied tenants takes more than just streamlining the application and rent collection processes. Therefore, you can further maximize your rental income by hiring a property management company to oversee your property. In addition to performing routine tasks such as accepting applications and collecting rent, a property management company will monitor your property and its tenants to ensure it is being properly maintained and your tenants are abiding by their lease. A property management company can also provide your tenants with a more personalized experience than what you can achieve with software. In turn, this will keep tenants in your rental so you are sure to have a steady monthly income from your property.

Step #2: Take Full Advantage of Tax Breaks

A number of tax breaks can help you to fully maximize your rental income, but you have to know what they are and how to use them in order to keep the most money in your pocket. Keep in mind that you can claim all of the maintenance and repair costs associated with your property. Therefore you need to keep track of these expenses so you can make the largest claim possible. As an added bonus, spending money on maintenance ensures your property remains in excellent condition, which will make it easier for you to rent out in the first place.

As the owner of a rental property, you can also deduct your mortgage interest along with other costs that you have incurred from buying the property. Some of these deductions will be in the form of annual depreciation because the property will be considered an asset in the same way as vehicles or machinery. Other deductible costs include the cost of contractors, business-related travel, insurance, and the expense of having a home office.

Step #3: Implement Fees

Implementing certain fees can help to keep you and your property protected while maximizing your rental income. Some fees to consider include:

  • Pet Fees: In addition to bringing in extra income from those tenants who want to keep their pets, it also increases your pool of potential tenants when you allow pets on your property.
  • Termination Fees: This fee is incurred if the renter wants to break the least early, thereby giving the renter an option to break the lease while still keeping you protected with the fees you collect.
  • Holding Fees: This is money that you keep if the applicant decides to go with another property other than yours. If you choose not to accept the applicant, the money should be refunded. If the applicant simply bails on you, the money is yours to keep.

Other fees to consider include application fees and extra occupant fees. Simply be sure to be upfront about these fees so your applicants and tenants cannot be disgruntled by you collecting them.

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