Have you recently invested in a property or want to know how to find apartments to rent out? Whether you live in part of the building and want to rent out the rest of it to tenants or wish to use it solely for the purpose of renting out to others, there are some tricks of the trade that can help. Make the best out of your situation and determine how you can have the best possible chance at earning money from your rental properties with these 8 ideas.
Make Positive Cash Flow Happen
Rental properties make it possible to bring in money directly. In order to have positive cash flow, you need to bring in more on rent than you pay on expenses for the property. For instance, if you have $800 in expenses for the property monthly and you charge $1,000 for rent, you’ll have a positive cash flow of $200 per month.
It’s difficult because you don’t always have a positive cash flow with rental properties. There often can be a lot of expenses such as a mortgage and maintenance costs. You can improve your return-on-investment by increasing rent or finding a way to save on energy bills.
Take Advantage of Those Tax Benefits
When you own rental property, there are certain tax write-offs for which you’ll be eligible. This reduces your taxable income and can mean a better tax refund. You can put in write-offs for the interest on your mortgage, any depreciation that’s occurred on your property, repairs you’ve done on the property, utilities, HOA fees, marketing and advertising costs, property management fees, legal fees, and much more. This means you are at a serious advantage and it's in your best interest to become skilled at finding apartments to rent out.
Be sure to talk to a tax professional in order to know what you can and can’t put in for write-offs when you’re doing your taxes.
Furnished Units Bring in More
While not everybody would like to rent a semi- or fully-furnished apartment, there are some who will, and gladly pay more to have this bit of convenience. Furnished property is a niche offering and you don’t need to provide new furniture. You can find pre-owned furniture at thrift stores, on Craigslist, or get it from family members or friends. When you have furniture already in the apartment, you can get away with asking more in rent. However, keep in mind that many who rent furnished units tend to stay a shorter amount of time. When someone wants to settle down somewhere, they typically won’t look for furnished rentals as they’ll likely want to have their own.
Charge for Property-Related Services
Yes, that’s right, property-related services can be an additional offering. You can offer services such as landscaping, housekeeping, or something else to your tenants in exchange for a fee per service. You might consider going through a local small business and hiring out while taking a small cut off their typical service charges. You don’t need to be renting out to multiple families in order to do this. Even though there’s not a large profit to be made, you can set your tenants up with lawn-mowing and other services that are sure to give them peace of mind.
Increase Your Equity
It is expensive initially to buy property, even if it’s a fixer-upper. You probably have a mortgage and all kinds of labor costs and fees on top of that. The great thing is that your tenants pay for the property for you. Once you’ve paid off your mortgage, you own the property outright and all (or most) of the rent goes into your bank account or pocket. You can make double payments on your mortgage sometimes in order to pay this off faster.
Purchase New Rental Properties Using Your Current Ones
After you already own a rental property, you can use it as collateral so that you can secure funding towards a new rental property. Before you do this, make sure you’ll be able to afford the new property and that you are confident in finding apartments to rent out. This will serve as a wonderful addition to your portfolio and is certain to increase your profits significantly over time.
As you can see, it’s not incredibly challenging to learn how to make money from rental properties. You just need to be resourceful and to have some capital to start out, or the ability to take out a mortgage and be good at finding apartments to rent out. Chandler David Smith offers a course and also is open to discussion to try to help you get started with turning property rental into a business or at least a way to make passive income.