Owning a rental property isn’t just about how much rent you can collect. Costs to maintain a property can be high and ultimately eat into your profits. There isn’t one way to lower your costs, but by using a number of methods, you can lower your costs and help improve your margins. Here are 10 ways to lower costs:
1. Screen your tenants
Finding the right tenants for your properties can go a long way in keeping your costs down. One way to do that is to do a thorough background check on all potential tenants. Check for their criminal history, credit history, as well as any past evictions.
Getting high-quality tenants means they’re more likely to take care of your property, pay rent on time, and stay as long-term tenants.
2. Review your mortgage
It’s always worth it to see if you can improve your mortgage. Since mortgage payments are one of the biggest expenses for a rental property, potentially finding better interest rates can help increase your disposable income. Shop around and compare rates, and see what options there are for refinancing your property.
3. Find a quality landlord insurance
Good insurance can help cut costs in case of an incident that can be claimed like injuries or property damage. Research and compare policies to make sure you are getting the best possible deal.
4. Stay on top of maintenance and repairs
Other than mortgage payments, maintenance and repairs are some of the biggest costs when it comes to owning a rental property. Through regular inspections and communication with your tenants, you can avoid having regular maintenance turn into large-scale and expensive repairs. Set up an annual inspection to walk through the property to check for possible problems. Also, make sure it is easy for your tenants to report any issues like a leaky faucet or possible water damage so routine maintenance doesn’t end up being a major repair.
5. Do minor maintenance yourself
While making sure you’re on top of any minor repairs can lower costs, there can still be the cost of labor. One way to reduce costs when it comes to routine maintenance is to do the maintenance yourself. This can include painting the interior walls. Replacing any small fixtures. Refinishing cabinets. There’s an endless supply of tutorials online that can walk you through routine maintenance and the more you do it, the better and faster you’ll get.
6. Be good to your tenants
A high vacancy rate and high turnover will both lower your revenue and increase your costs. A great way to lower costs while also increasing your income is to be a good landlord and help encourage long-term tenants. One way to do this is to fulfill your legal obligations as a landlord. It is also important to be responsive to your tenant’s concerns. Try to accommodate any issues they may be having even if it isn’t your legal obligation. A good tenant who stays happy will stay long-term which can lower costs by not having to turn over the property every time a lease is up.
7. Instead of a traditional property manager, use Ziprent
Property managers can be expensive and eat into your profits. Using Ziprent is far more cost-effective while still giving you all of the benefits of a traditional property manager. Ziprent provides local managers who can handle any in-person needs while also providing detailed reports about your rental property. Contact Ziprent for more details.
8. Charge a fair rent
While it can be tempting to charge the highest possible rent, that can lead to high turnover and end up lowering your revenue. Look into what similar properties in your area are charging and be sure to charge the market rate. If you’re looking for a quality, long-term resident, it might be a good idea to charge slightly under the market rate. A long-term tenant paying slightly under market rate could be more profitable long term.
9. Maximize tax deductions
There are a number of potential local and federal tax deductions for rental properties. Hiring an accountant can help you get the most out of tax deductions and help reduce costs.
10. Keep detailed reports
Make sure you do a thorough walkthrough before a tenant moves in, and after they move out. Keep a detailed report of the condition of the property that way any repairs due to damages can be taken out of the security deposit.
With a little research, hard work, and attention to detail, you can make sure your costs don’t get out of hand and eat into your income. Housing markets can change over time and be on top of your costs can help make sure you don’t end up underwater down the road.