How to Increase and Maximize Your Rental Income
If you’re looking to invest your hard-earned money, real estate is a great option. According to a 2019 poll conducted by Gallup, 35% of Americans believe that real estate is the best type of a long-term investment. Many people still look to rent, given the uncertainties and fluctuations in the job market, as well as the rise in remote work that has given digital nomads and families alike more opportunities to move and keep moving.
Apartment List’s study also shows that the national rent index over the past year has increased by 0.3%. Additionally, in the same study, 67 out of the 100 largest cities in the U.S. have reported monthly rental increases.
These statistics simply show that the rental property business will always be thriving. If you have already purchased a property, the next thing you need to do is to make it appealing and marketable. Then, using a rental income calculator can help attract the right tenants and achieve your desired profit margin.
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Adapt Your Rental Properties to Your Local Market
As a landlord, one thing you can do to maximize your rental income is to rethink how you operate rentals. Here are some strategies for positioning a single-family home:
Typical Rental Housing
This is the most common scenario in the property rental market. A tenant rents your property and you charge him or her more than your expenses. In this case, use a rental value calculator to make sure you charge your tenants the right amount for rent. You can also increase the property’s profitability without charging the tenant a higher price by keeping expenses at a minimum.
Dormitory Housing
If your property has several rooms, a strategy you can follow is to rent furnished rooms to different tenants. Use a monthly rent calculator to determine the monthly lease you will have to charge per room without utility expenses. Likewise, co-housing opportunities attract peers who want to live together, which can automatically attract additional tenants.
Rooming House
You can also rent the rooms in your house to short-term tenants. The goal here is to provide an affordable place to rent for days, weeks or months at a time. As long as the tenants are willing to share a bathroom, kitchen, and other living spaces, then this strategy can work very well.
Bed and Breakfast
One of the most popular ways to maximize your rental business is to convert your property to an inviting bed and breakfast. Aside from offering amenities, you can prepare a continental breakfast or offer discounted attraction tickets to provide your guests with a unique and memorable experience. You can charge a premium rate with this kind of setting, especially if the location of your property is ideal for travelers.
Increase the Property’s Value
Whether your guests plan to have a short or long stay, people will always choose a property that is well kept. Repairs and maintenance can definitely impact your rental property calculator’s equation. In fact, you can easily increase your rental income by applying these changes:
Bathroom Makeover
It will be expensive to rip out and replace the whole bathroom just to give it a brand new look. Instead, you can cover outdated tiles with new paint. Another great tip is to repaint vanity units and add modern handles on the drawers and doors. Likewise, don’t forget to replace old or broken taps and showerheads.
Kitchen Makeover
A fully functioning kitchen can be one of the main attraction points you can use to market your property. You can give your kitchen a fresh look by repainting it, adding new handles for the doors and drawers and replacing the taps on the sink. Check if the appliances are still working well and which you should keep or get rid of.
New Carpet
Make your property more appealing by adding new carpets. If you have a small unit, you can have the whole place carpeted. However, if your unit is large, you can simply conserve and place carpets in high-trafficked areas like the lounge room or walkway.
Air Conditioning Unit
HVAC units can increase our utility bills. The trick is to opt for a reverse cycle air conditioner instead. This is an energy-efficient unit, because it can cool your property during summer and warm it during winter. Install it on the side of your property or in the balcony corner, so that it wouldn’t stand in the way of your tenants.
Use Tax Benefits
Taxes are an inevitable part of a rental income calculator equation. Paying taxes can be a pain, but know that you can take advantage of tax deductions. Just make sure that you have proper receipts to validate your claims. Some of the tax deductions you can claim include:
Loans/Interest
A landlord’s biggest deductible expense is interest. This can work if there is a mortgage on your property. Another applicable scenario is the interest earned on credit cards used to purchase goods or services for your rental property.
Depreciation of Assets
A property will be considered depreciable if:
- It is expected to last for over a year
- It remains valuable to your business
- It lost value or it had eventually worn out
You can deduct depreciation every year on your taxes. The expenses should be spread out over the years the property exists.
Repairs
Any repairs or remodeling job you do to make your property marketable can be considered a tax deduction.
Other Expenses
- Utilities
- Insurance
- Advertisements to promote the property
- Transportation or visiting your asset to conduct business
- Management fees
Final Thoughts
Property rental can be a promising business if you are wise about your investment. Using a rental income calculator can help you analyze or maximize your potential income. This tool will help determine the right occupancy rate you need to charge your tenant or adjust other expenses so that you’ll get a maximum return of investment.
Whether you’re new or a veteran in the property rental industry, you’ll learn a lot from the Night Helper blogs. We offer interesting reads about various topics, including lifestyle, technology, and more. Make your property marketable by following our tips on how to increase your home’s value!
