Buying your own home can be a great way to build long-term wealth. When you’re paying into a mortgage and own a house, that’s a better deal than renting. But that’s not where the value of real estate ends. If you build enough wealth and save enough money, you could actually re-enter the rental market — from the other side. You could purchase an income property, which is property that generates a cash income. Owning a rental property will give you a source of passive income that could make a real difference in your bottom line.
But not all rental properties are the same, and not all rental properties are used properly. If you want to maximize your income and expand your wealth as effectively and efficiently as possible, then you should read and absorb our tips for making the most of your rental property.
Use the right landlord software
Landlords have a lot of tasks to juggle. In addition to keeping their spaces maintained and collecting rent, they need to market vacant spaces, take rental applications, run background checks, and choose the right tenants to move in. That can be a headache, but it’s easier when you have landlord software.
Technology has transformed the rental market, and most would-be tenants now look for their next apartment or house online. So make sure that you’re using online software that lets you list your spaces, set up a rental application, and run background and credit checks.
Get every last tax deduction
Real estate businesses have a lot of advantages. And a whole lot of those advantages become apparent at tax time. If you play your cards right, you could deduct a whole lot of stuff from your real estate income. You could make lots of money and pay less in taxes — what’s not to like?
Deductions are everywhere in real estate. You can deduct depreciation, maintenance fees, and more. Do you use a car for your business, or a maintenance truck? You could deduct depreciation there, too — plus auto maintenance, suggest experts who offer automotive, diesel and collision repair academic programs.
Of course, you need to be careful to follow the rules, because you don’t want to make an enemy of the IRS. At the same time, you don’t want to miss out on any valuable deductions. So what should you do? Hiring a tax professional is a great idea, because you’ll know that things are being done right and you’ll likely save money relative to doing your own taxes (which, while free, may not result in your scoring every possible deduction in the way that you would if you relied on a tax pro).
Reduce tenant turnover
When a tenant moves out, you may have the chance to improve the space they were living in, increase the rent, and make bigger profits in the future. But a lot of variables are at play, and a lot of short-term expenses to worry about. That’s why, generally speaking, landlords are better off reducing tenant turnover. When someone is in your space and paying rent regularly, that’s an ideal situation — so don’t mess it up!
To keep tenants happy and keep them in your space, simply fulfill your obligations as a landlord. You don’t need to be your tenants’ best friend (in fact, you shouldn’t be), but you should be prompt and responsive to their maintenance requests and complaints. Make sure that your space stays comfortable, healthy, and as convenient as possible by being proactive about maintenance and quick to make repairs. If you do that, you’ll hold onto paying tenants and enjoy a more efficient rental business.