If you own a rental property, you’ll know that managing it can be a lot of work. Having said that, it’s worth it because it can provide you with an extra income.
You also have the opportunity to build wealth over time as the property value increases.
In this article, we’ll discuss some effective hacks to help you manage your rental property more easily and also to help boost your income.
Take Out Property Insurance
It was a wise man who said you should always insure what you can’t afford to replace. Property insurance:
- helps property owners avoid financial losses if the property they own suffers damage from natural disasters (e.g. flood, fire or storms).
- protects property owners against losses from theft and burglary.
- covers damage to your property and its contents including furniture, fixtures and fittings.
- provides liability coverage for any injuries that may occur on your property
- pays any legal expenses arising from a lawsuit related to an accident at your rental unit
As you can see, a comprehensive property insurance plan can go a long way towards protecting you from unexpected costs which could jeopardize the profitability of your investment.
In terms of maintaining the property you could invest in a Rental Guarantee program to cover up to $5,000 in risk of rental loss, or a Pet Guarantee Plan in case a pet damages your property.
It’s also possible to take out an Eviction Protection Plan covering court costs and legal fees if you need to remove someone from your property.
Screen Your Tenants Thoroughly
It can be tempting for landlords to accept the first potential tenant that comes their way, especially when they’re in a hurry to receive rental payments.
However, it’s important to screen these people carefully and run credit and background checks beforehand. The credit check will reveal any potential red flags, such as a history of not paying bills on time.
The background check can reveal criminal convictions that could make the tenant a risk. You should also seek a reference from the person’s previous landlord if applicable.
If you’re considering renting to someone who doesn’t have a lot of credit history, ask for written proof of their rental history and employment instead.
Similarly, if they’re self-employed, ask them to bring a tax return with them. Another way to protect your rental income is by requiring a security deposit from tenants.
This will give you a financial cushion in case the tenant damages the property or fails to pay rent on time.
Once you accept a new tenant, be sure to include specifications in the tenancy agreement regarding things like payment and behavior requirements.
Maintain Your Property Well
Keep the property clean and well-maintained because this will help you attract new tenants. It will also keep your current ones happy, and they’ll be pleased to recommend your other vacant properties to friends.
Before new tenants move in, make sure to:
- Give the property a good clean and freshen up with new paint or carpet.
- Get rid of any rubbish or old furniture left behind by previous tenants.
- Make sure that everything is working properly (including any appliances that come with the house).
- Make sure all smoke detectors are working properly and replace them if need be.
- Ensure there is no dampness or mold in the house and make any repairs before the new tenants move in.
If you invest in new windows and doors, you’ll improve your property’s energy efficiency.
This will keep the heating costs down for your tenants – and reduce the amount of time that it takes to find new ones.
By investing in quality security equipment you’ll be protecting the property and stewarding its contents.
Outsource
It may be that you can afford to appoint a property manager or management company to oversee things like maintenance, landscaping, and rental collection.
This could free you up so you can focus on more lucrative purchases and property deals. You may also wish to appoint an accountant to organize your finances.
They can ensure your tax returns are both prompt and accurate. In turn, this will avoid you incurring financial penalties from the IRS.
As you can see, there are lots of things you can do to successfully manage your property and also to increase your income.
Some options will involve you spending money, but they should be viewed as financial investments in your property.
In turn, you can receive a consistent rental income, watch your property value increase and focus on other exciting new ventures along the way.
