April 15, 2024

Illuzzi Letter

Envisioning And Creating Your Dream Home

How To Make Money Investing In Rental Properties

Rental properties are a great way to build equity in real estate without carrying the burden of hefty monthly mortgage payments. With guaranteed monthly income coming off your property, you can secure higher financing and make your monthly payments while still clearing a profit. However, as with any business venture, there are risks. For some tips and tricks that will help you make money investing in rental properties, keep reading.

Go for Higher End Rentals

While it can sometimes be harder to fill pricier rentals, you’re more likely to find quality tenants that are older, respect the space, pay their rent on time and won’t cost you money in the long run.

Overall, high-priced luxury units can be difficult to rent, but mid-to-high range urban rental units tend to attract young, professional couples who are responsible and good tenants. While you shouldn’t upgrade a rental unit too much, a fresh coat of paint and a few design touches can go a long way when it comes to attracting quality tenants.

Do Credit Checks

If it’s allowed under your state’s tenancy act, credit checks are one of the best ways to get a clear picture of a prospective tenant’s payment history, financial picture and level of responsibility.

While a credit check is going to cost you anywhere from $20 to $60, the amount you’ll save on lost rent, chasing down delinquent tenants or filling a broken lease is well worth the expense.

Be Competitive

If your property is in a renter’s market, you’ve got to be competitive to attract tenants. And once you have them, you need to stay competitive to retain quality tenants.

Remember, if raising the rent 10 percent on a high-quality tenant means you might lose them, you’ll also be losing at least a month of rental income, the expense of finding a new tenant and the peace of mind that a good tenant provides. Sometimes, that extra $50 per month just isn’t worth it in the long run.

Other ways to stay competitive as a landlord in a renter’s market is to offer incentives like included utilities, cable television or free wireless Internet access.

Opt for Amenities

Something as cheap and simple as placing a washer and dryer into a unit can raise your rental income by a few hundred dollars every month. Adding small amenities to your rental units will not only set your apartment apart, it will also translate to higher returns on your investment.