Owning rental property is a very lucrative investment, especially nowadays when rentals are scarce.
However, the mere fact that you own rental property doesn’t mean you’re actually getting the most out of it. Buying a rental property is the easy part but how you manage it determines whether it’s profitable or not.
Just like with any other business, you need a plan for this one too. There are so many things to take care of regularly and many landlords struggle with expenses and maintenance.
Are you making a sizeable profit or just trying to minimize losses and stay afloat?
If you own rentals or even if you’re considering getting into the industry, here’s what you need to know to get the most out of your rental property.
Get Landlord Insurance
First things first, you should get landlord insurance if you own rental property.
This ensures you, as the landlord, are protected in case something unexpected happens.
Although it’s not mandatory, it’s clever to get landlord insurance because it covers a range of things such as loss of income from your rental property, damages done to the building, and most importantly, liability.
You never know what might happen and when a lawsuit might come your way that could potentially leave you out of business.
This way, you’re protected when something goes downhill.
What your insurance policy will cover depends mostly on your priorities. We suggest finding an insurance company and discussing possible options to find the best solution for you.
Similarly, if your building has suffered damage such as burst pipes, your insurance policy can cover that so you don’t have to pay the bill.
Take Screening Tenants Seriously
As a rental owner, you can’t make money if your property is sitting empty, right?
But letting in any tenants who apply without properly screening them would be a mistake.
Handling problematic tenants and eviction is a complex and costly process so this never works in your favor. Not to mention the time and cost it takes to prepare the rental once again for new tenants after you’ve evicted the old ones.
You want to take the time to screen tenants and ensure you let in reliable applicants who can commit to paying rent and taking care of your property.
Screening applicants involves a credit check to see if they can handle such a financial commitment as well as a background check to see if they have any criminal history.
This might seem a bit tedious and time-consuming but it’s necessary if you want to make the most out of your rental property. It pays off in the long run.
Inspect Your Rentals Regularly
Inspecting your property regularly is a must if you want to maximize your profit.
As good as it sounds, you can’t just let in new tenants and never check on your property again until they move out.
This allows you to tackle some issues early before they become a bigger, costlier problem.
For example, a small repair delay can turn into a big mess later if it goes unchecked. We’re talking about leaking pipes, water heater issues, or any electrical-related problems that can turn into quite the complications.
Stay on top of everything and maintain your rental in good condition to avoid losing time and money later.
Hire a Property Management Company
There is another way to get the most out of your property that isn’t time-consuming or tedious. If you hire a professional property management company, you won’t have to deal with any of the abovementioned issues since they will take care of everything.
A property manager will screen your tenants, handle maintenance and repairs, deal with evictions if necessary and ensure everything is in order in your building.
What’s even better is that the property management company will ensure that your rentals don’t stay vacant for long causing you to lose money.
Choosing this option does mean you will have to set aside a portion of your profit to pay for the services, but it will take so much off your plate that it is most often worth it.
This option pays off especially if you own multiple rentals and can’t dedicate the time to manage them all. For a percentage of your profit, you will enjoy peace of mind and have loads of free time on your hands to focus on other things.
If you are only now looking at rentals and thinking of investing in them, we’d say go for it because the rental market keeps growing despite the ongoing pandemic and everything.
Owning rental property can be a stable source of income but only if you do it right.
Mismanagement will hinder your growth and will hardly bring you the profit you were hoping to see. So keep the aforementioned things in mind to get the most out of your rental properties.
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