Income property owners have two main and distinct goals when putting together a property portfolio. The first aim is to maximize their capital return over the term of their holding. To many investors looking to earn a living from their portfolio, the second factor – generating income – can be more important. These simple steps will help you to maximize the income generated from your properties.
Reducing the monthly expenses on a property is the first place to start. Be sure to shop around for the most competitive finance and insurance deals and regularly review these arrangements to ensure you aren’t paying too high a rate.
A second step is to make sure that you maximize the tax deductions available to investment property owners. These include mortgage interest, depreciation, insurance and repairs. Using a competent tax advisor to take advantage of all available deductions can assist in significantly reducing your expenses.
The alternative way to maximize income is to ensure every last cent of rental income is squeezed from the property.
Many investors consider “multi-letting” properties in order to generate the most rental income. While rental agreements to a family, couple or individual may be commonplace, an investor landlord will typically achieve more rent by leasing bedrooms on a “room by room” basis.
A further step to take to ensure a high level of income is to ensure the properties are, and remain, in excellent condition. A mistake made by many landlords is that they don’t invest in their properties because they don’t believe they will see a return on that money. By fitting clean, modern kitchens and bathrooms you can charge a premium rental income which more than covers the initial capital expense of such improvements.
Finally, ensure that your tenant screening process is robust and thorough. Having a great tax advisor and a beautiful property will count for nothing if your tenants are not paying their monthly rent. Make sure you vet all applicants carefully, have them sign specific lease agreements and be responsive to repair requests and disputes.