If you own a rental property, then you own a business. It means that you have a responsibility to run your rental property like a business: focusing on generating rent and making a profit. Unfortunately, many landlords do not know to maximize their rental property without raising their rent rates to sky-high levels. However, there are some ways in which you can maximize your rental property’s profits.
1) Renovating Your Property
It’s the number one that rental property trick to make money: renovating. But it’s not about renovating the whole house, but rather about focusing on the ‘right’ parts of the home. So how do you figure out which section of the property do you invest in? Here is how you can narrow down your focus:
- If the room or the part of the house is old and worn out
- There are sections of the home which look like they need repairs
- If you feel that a room or section in the rental property needs an update
With these three pillars, you will be able to narrow down your decision on which room you should renovate. Smartly investing in your property means you can maximize your profits.
Any investment into your property can see you increase your lease to make extra earnings, and get back money from your investment.
2) Keep Your Rent Price On Par With The Market
Researching the market rate of surrounding properties, and the value of your area will go a long way to ensuring that you are getting the most out of your rental property. It is suggested that you research:
- What similar properties in the area are charging for rent
- What is the most you can generate from your lease, as well as how low you can go
- Consider what separates your property from others and what those differences are worth. It will be your selling points when it comes to your rental price.
Furthermore, every time you renovate your property, consider how much you have invested in your property, and update the price of your rental cost accordingly. There is no point renovating if you don’t get the money back somehow.
3) Taking Preventative Action
It goes without saying that to maximize the profit of your rental property, you have to spend money. That means focusing on preventative maintenance on certain parts of your home to ensure that it runs effectively without any issues developing down the line. This can include:
- Extending and ensuring that your HVAC systems (air conditioner, heater and furnace) are checked and running efficiently.
- Keeping appliances in the property operating at their best, such as your oven, stove, dry cleaner and more.
- Restoring your floors
- Taking the initiative with any damage to the property. Fixing them early will stop worse problems developing later on.
The more you focus on restoring and keeping your rental property in optimum condition, the more you minimize risks.
4) Hire A Property Management Company In Calgary
For many homeowners, the prospect of trying to increase the value of their rental property seems daunting. They are overwhelmed by all the work that comes with it. For those people, and if you are facing a similar situation, hiring a Calgary property management can help. These experts will manage your property for you and can provide you with insider information on how to maximize your rental property profits. They will analyse to help you understand how and where you can maximize the value of your rental property.
5) Enforce Late Fees To Tenants
While not trying to sound like too much of a dictator, it is a smart idea to motivate your tenants by enforcing a late fee on them so they can pay their rent on time. You are ensuring that your tenants pay on time (it’s money that goes into your mortgage and back into your rental investment), and you don’t waste time chasing them up. At the same time, you will be maximizing profits by ensuring that you get your rent on time. If you have a rental property management team working for you, they can handle the collection for you (another reason to hire one!).
6) Get Landlord Insurance
Finally, to ensure that your money is not wasted or lost, you need to get landlord insurance. Any investment that you put into your property means should get it covered by insurance – especially helpful if you’re consistently renting your property to tenants. The financial cost of having landlord insurance is nothing compared to what might be damaged or lost if you don’t have it.