Rental properties continue to be one of the best ways to invest and make consistent returns with real estate. Besides the income they provide, rental properties can benefit owners through appreciation and all the tax advantages that come with owning such a property. Managing rentals can be a handful though, and if you own rental property, you’ll be looking for ways to maximize cash flow and your ROI. In this post, we cover some tips that will make managing rental properties easier and help you get the most from your investment.
Tip #1: Know landlord-tenant laws
One of the first things you need to do if you plan to successfully manage a rental property is familiarize yourself with the landlord-tenant laws in both your state and locality. These laws are important to know because they protect your position as a landlord and they help make a fair renting environment for all tenants. If you plan to implement personal policies (for things like smoking or late rent) then you need to be sure they comply with the laws in your particular area. You will also need to establish these policies clearly from the start so as not to run into any issues later down the line with your tenants.
Tip #2: Stay on top of maintenance and repairs
Another important aspect of managing rental property is taking good care of the properties themselves. It’s vital to conduct regular maintenance of properties you own so that any minor issues don’t end up ballooning and costing your more than needed. Preventative maintenance of this variety can end up saving you thousands. Be sure to conduct regular inspections of the property (with your tenants consent) and take care of repair requests as soon as possible. The extra care you give to the property is sure to be appreciated by your tenants.
Tip #3: Handle tenants with care
Finding good tenants and building solid relationships with them will help make your time managing rental properties much easier. Tenant screening will be crucial to this process: you should conduct credit and background checks for every potential tenant, and you should also ask for proof of income and rental history if applicable. Once you have found good tenants, you’ll want to treat them well so they’re more likely to stay renting at your property longer. Ideally, you should be easy to reach whether by phone or text, and responding promptly to requests will be key here as well.
Tip #4: Make key renovations
A great way to get more out of your investment property is by making renovations to it. This helps boost your rent in the short term and also increases your property’s resale value. Some of the easiest upgrades include a fresh coat of paint and new lighting fixtures. If you’re looking to make more of an investment, updating the kitchen and bathrooms tends to add the most value to the property. The key to managing rental properties is charging the appropriate amount for rent, so after upgrades have been completed, take a look at comparable units on the open market to ensure it’s the right amount.
Tip #5: Work with a tax professional
Owning and operating rental properties comes with significant tax advantages, but if you aren’t working with a tax pro you may be missing out on some of these savings. They will be able to help you maximize deductions from maintaining your properties as well as operating a rental business. Besides that, they can help you conduct a cost-segregation study to save you money with depreciation. With cost-segregation, all assets on a property are depreciated over the usable lifespan of the asset. The building is depreciated over 27.5 years, but even upgrades like furniture and appliances can be included in the study. Make sure to work with a tax professional to get the most out of your rental real estate business.
Bonus Tip: RCN Capital
The easiest way to save with rental real estate is to find a trusted lender that can get you the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. RCN Capital also has flexible and competitive loan options available. Are you looking to purchase or refinance a long-term rental property? Connect with us today.