Whether you are a new or experienced landlord, your end goal is to make money. Considering these two key factors may help you to increase your rental profits.
Purchase the Right Property at the Right Price
To maximize your profits, you will want to purchase property that has a high probability of being rentable at a price sufficient to both recoup your investment in the property and generate a profit. Start by researching the market value of similar Northwest Indiana rental properties. Ideally, you would like to purchase the property for less than market value, but you definitely don’t want to go over. Staying at or under market value offers you protection in the event that you need to sell the property.
Next, you need to find out what similar properties are renting for and how often they stay rented out. In order to make a profit, you need to be able to keep the property rented out frequently enough, at a high enough rate, to cover your purchase price, marketing and maintenance costs of the rental. Be sure to include some leeway for expenses that are not certain, but could occur, such as court costs to evict, late or missed rental payments and tenant damage to your property.
Find the Right Tenant
The biggest risks for landlords are tenants who do not pay their rent, cause extensive damage to the property or create other problems. Carefully screening potential tenants is key to a profitable rental. You will want to look for tenants with stable incomes, good credit history and a good history with prior landlords. Tenants who have previously missed payments, damaged the property or moved out of their rental without notice may not be a good risk. Additionally, it can be a good idea to do a criminal background check to protect yourself and your future tenant’s neighbors.
Renting a property can be a good way to generate extra income or make a living. Keeping these two key factors in mind can help you maximize your rental profits.