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You’ve acquired a long-term rental, now it’s time to make the most of your investment. Here’s 6 ways to maximize the return of your long-term rental property.
Offer Attractive Amenities and Services
Tenants typically desire uninterrupted time throughout the day. As a result, tasks like laundry, food shopping, and housecleaning may get put off. Some tenants, particularly those in high-income areas, are prepared to pay for someone else to handle these responsibilities. You can provide these services as a landlord by working with other companies, and you can charge your tenants extra rent or a fee to cover the cost of each service.
Invest in the Right Location
When it comes to increasing your rental income, location is crucial. The rental income you can expect to make and the property costs you'll incur depend on the market where you purchase a home. Think about the local property taxes you'll be required to pay. While property tax rates are relatively high in some areas, several states impose minimum rates. Investing in a region with a low cost of living could help you keep costs down by making it more economical to maintain, repair, and renovate your property.
Price the Rent Appropriately
You will experience an annual increase in the carrying costs of your rentals due to the rising price of common area utilities, insurance, taxes, and upkeep. It will feel like you have less money in your pocket from one year to the next, even with little inflation. Finding a price point that is close to fair market value should still be your goal, even if you don't have to have the most expensive house in the neighborhood. To keep up with inflation and increases in your property expenses, you should raise rent by 1-3% annually. Consider doing research to see what similar units in your area were rented for in the last year, and what asking prices are right now to help set your rent price competitively.
Perform the Preventative Maintenance
It's far easier to say than to accomplish when it comes to maintaining your rental property. The temptation to just fix things when they need fixing might be strong, especially if you work a day job and own investment properties for extra money. However, you'll end up spending more time and money in the long run if you don't take the time to maintain your units. After all, neglected critical systems and appliances will breakdown more frequently. If you wish to maximize the return on your long-term rental property, you should aim to perform preventative maintenance regularly.
Find the Right Insurance Policy
Your margins could be killed if you overpay for insurance. Here are some guidelines for searching for insurance:
- Shop around for quotes - Never accept the first insurance quotation you are given, regardless of how persuasive the salesperson may seem. Spend some time gathering at least a few quotes to contrast with one another.
- Consider using a local insurance office – Don’t overlook local insurance agencies; often times they provide greater customer service than national companies. Since word-of-mouth referrals are essential for small insurance offices to remain in operation, reputation is key.
- Reevaluate your insurance every few years - It's worthwhile to reevaluate your insurance every few years, even if you don't want to spend the time doing so. It’s in your best favor to look and see if there are better deals available.
- Bundle your policies - If insurance providers are covering more of your assets, they will offer you better prices.
Choose the Right Tenants
When selecting tenants for your investment properties, exercise caution. Not everyone who arrives to the rental property as a result of a "for rent" advertisement is the ideal applicant. Considering conducting personal interviews to deem tenants worthy of renting your property. In addition to a personal interview, thorough tenant screening is required, including background checks, credit score reviews, and landlord referrals.
RCN Capital
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs.Connect with us todayto discuss your next real estate investment.