Mucho Dinero
You may not speak Spanish, but this is one of those sayings almost everyone knows. Mucho dinero, or “a lot of money”, is one of those sayings you’re sure to find in a real estate investor’s vocabulary.
Rental income profit is the big goal, and we want to aim to find the most profitable investments.
Let’s say we have found the most profitable investments in real estate. In order to make the most out of those real estate rental property investments, you need to find the best ways to make rental income.
Now, we present to you how to make “mucho dinero” when it comes to your rental income. Utilize these tips, and we’re sure you will be saying hello to the most profitable investments in real estate.
Rental Income Money Maker #1- Decrease Vacancy
The way to decrease your vacancy rates is to find yourself some long-term tenants to avoid turnover. A turnover rate is known as the rate at which tenants leave your investment property. Having a vacant residential real estate investment is the nightmare of any real estate investor.
You want to aim at not only keeping turnover rates low but at bringing turnover time to the minimum as well. The last thing you want is to have your investment property empty for a long period of time. Take a look at the demand in your area. Make sure the area you are located in has an acceptable occupancy rate.
Almost every property in every neighborhood has solid demand at a price. If your vacancies are consistently high, you may be doing it to yourself and may need to think about your price point. However, make sure you’re being compensated in rental income with what you’re providing.
So, what happens if you’re in an area where the demand isn’t too high? This is where your property’s individuality comes into play. Your rental property may have brothers or sisters, but no twins. As soon as you learn a tenant wished to move out, post a couple of ads to get some exposure.
Use your social media, you’ll be surprised what kind of opportunity you will open up for yourself. With the right marketing skills, while being located in an acceptable area, you’ll be able to keep that rental income in your pocket, and not out of it.
Rental Income Money Maker #2- Minimize Turnover
Find your people. Dealing with tenant turnover can get costly. Although you will do what you need to do get your investment property rented out and rental income flowing, why not avoid it in the first place?
With this aspect, it is quality over quantity. To get a hold of that rental income, you want to find quality, good tenants to become residents in your investment property. You want individuals who want to look at your investment property as a home, not just a house. Hence the word resident. You want to find the people who want a residence, not just a space to put a roof over their head.
The rental rate you charge is not the single factor that takes part in tenant retention. Customer care is the second hand that feeds your rental income. Whether you manage the rental property yourself or have taken the property management route, you need to assure your tenants are being fairly treated.
Respect, professionalism, and valued concerns are all key factors playing in keeping the tenants you have. The best tenant-landlord relationship keeps the thought of leaving your investment property out of your tenants’ minds.
Related: What’s the Secret to Maintaining a Good Landlord and Tenant Relationship?
Rental Income Money Maker # 3- Strategic Rental Rate Pricing
We mentioned this a little bit earlier in the blog, but we have to stress the importance of strategic pricing. You have to have the mentality of a businessman with the heart of a mother. Odd mix, we know, but you get the best balance in this way.
Attract your tenants with your great charisma and relatively low rental rates, but increase the charge with time. This sounds contradictory, we know, but on the contrary, you are getting a balance.
Tenants do tend to be more loyal if they don’t find lower rent in other rental properties in the area. However, this should not stop you from raising rental rates if you have a good reason to do so. Moving costs tenants money as well, money they could use for much better things. So, don’t assume a tenant will be quick to move out if the rental charge is increased.
To learn more about how to make rental income with Mashvisor, click here.
If your tenant is getting what they’re paying for, they won’t mind the increase. It is a give and take relationship, so balance yourselves. A good tenant would think about their current rental being much better than the value of a newer rental property space plus the moving costs, giving you the upper hand.
Get an idea of your rental comps. You may find that there is some flexibility to increase your rental income by 1-3% each year, while still remaining competitive. Some increase is much better than no increase at all.
Tips for Strategic Rental Increase
- Explore new costs such as increased HOA fees, which are known to cover utilities and amenities most tenants enjoy. Communicate to them that this coincides with an upgrade to the rental rates. Hello, upgrade to rental income.
- Plan new maintenance with a lease renewal so tenants feel they’re benefitting from the rental rate increase. For example, upgrade some old windows, or schedule a new paint job for the investment property exterior. A small change that won’t cost you or the tenant millions never hurts anybody.
Stability Is Safe
We know you like to feel safe when it comes to your rental income. Here at Mashvisor, we like to know you’re feeling safe as well. With these simple tips, you will be more than able to obtain the rental income you have set for yourself. Whether you want to become a millionaire, or to make just enough to get you through the years, you can do it. Take the risks when you need to, so long as you know what is coming.