Strategies to Maximize Rental Income Profit

The whole point in renting out your property is to earn an income, which is why landlords are constantly seeking new and better ways to maximize rental income profit. Here are some tried and true methods for increasing the cash flow you generate from your rental property.

Improve Safety

Renters are often willing to pay more to live in a home in which they feel safe. There are many ways to accomplish this, such as to install sufficient smoke and C02 detectors in the home, provide ample outdoor lighting and improve outdoor stair safety.

Upgrades like these are one of the best ways to maximize rental income profits by making your property more attractive to tenants, thereby attracting higher-quality tenants.

Other upgrades that can make your property more attractive to tenants include:

1. Modernizing the kitchen with new cabinetry, countertops and appliances
2. Giving a fresh coat of paint to the interior and exterior
3. Laying down more durable and attractive flooring
4. Improving the bathroom with upgraded tiling, fixtures, vanities and showers or bathtubs

Embrace Tech

These days, landlords have at their disposal an abundance of software products and apps for making the regular duties of their job simpler and more efficient. These include programs for such tasks as:

1. Accepting rents online, including through automatic payments
2. Reminding tenants when rent is coming due
3. Facilitating important communications between you and your tenants, such as regarding late rent or possible eviction notice
4. Managing rental applications, including using AI to generate automated responses to applicants and scheduling viewings of available units
5. Using smart technology for climate and safety controls, like thermostats and sprinkler systems

Increasing energy-efficiency in your rental units is also particularly beneficial if you’re including utilities in with the rent.  Remember, saving time means saving money.

Reducing Taxes

Taxes can easily eat away at your cash flow. But one of the simplest ways to maximize rental income profit is to minimize the proportion of revenue you generate from your rental income that you pay in taxes. There are in fact a variety of deductions that can help landlords to reduce their tax burden.

Items you may be able to deduct from your taxes on rental income include:

1. Professional, third-party or legal services you employ to aid in property management and operations, whether as independent contractors or employees
2. Mortgage interest you pay on loans you take out to buy or improve a property
3. Insurance premiums for protections from flooding, theft and worker’s compensation and landlord liability claims
4. Home office expenses, like for personal property you utilize for professional, property management activities
5. Travel expenses, like automobile expenses to travel to and from your rental properties
6. Property repairs made during that tax year, whether minor or major

Permit Pets (for a Premium)

Pet owners have little choice when seeking a home to rent but to find a landlord who accepts pets, and so they’re prepared to have to pay more for the privilege. As a landlord, you can improve your rental income cash flow by allowing pets but charging extra for that permission.

There are several ways you can charge tenants to keep a pet in their home:

1. Pet fee - A one-time, non-refundable charge for the right to keep the pet in the home
2. Pet rent - A recurring charge added to the regular rent for as long as the pet remains in the home
3. Pet deposit - A one-time, refundable charge to cover any damages caused by the pet living in the home

Offer Laundry Services

Tenants are willing to pay a premium on rent to prevent having to go elsewhere to launder their clothes. By offering one or more coin-operated laundry machines in your rental property, not only can you charge higher rents but you earn the extra cash your tenants pay to use those machines. Depending on your set-up, you can either have a laundry room with one or more washing machines and dryers in the building or install a washing machine and dryer in each rental unit.

Offer Storage Space

Renters often own more stuff than they have space in which to put it all. If you can offer your tenants a place to put that extra stuff they don’t need for day-to-day living, they could be willing to pay more to live there. Consider whether you can transform certain unused or underutilized spaces in your property such as attics, basements, crawlspaces, common areas or outdoor sheds into extra storage space.

Screen Tenants

Another way to maximize rental income profit is through diligent tenant screening procedures. Higher-quality tenants translate to higher potential rents you can charge and lower outputs for managing issues like repairs, late or missed rents or sudden vacancies. Tenants who take pride in their living space make your life easier and more cost-efficient than those who don’t.

One of the best ways to find higher-quality tenants is to ask your high-quality existing or former tenants for referrals or recommendations of applicants for current vacancies. When a vacancy occurs, simply ask those individuals to spread the word about it among trusted family and friends. You could even offer them a discount on a month’s rent or other incentive for the referral.

Regardless of whether a rental applicant came with a recommendation from a reliable source, it’s still incumbent upon you to do your due diligence and screen all candidates thoroughly before signing any contract with them. Conduct a thorough background check, credit check and rental history check on every potential renter. That’s one of the best and easiest ways to avoid lost income or increased landlord expenses in the future.

If you need patio repair to help you maximize profit from your rental property in Los Angeles County, give us a call today and we’ll send someone over to assess your needs and provide a fair and reasonable estimate.