Congratulations, you own real estate and you’re making rental income! Surely, now you can just kick up your feet and let the money flow into your account without lifting a finger? Well, if only it were that easy.
If you want to maximize your rental property’s profit for the best ROI, there is some work involved. In this brief guide, we’re going to tell you about four costly mistakes that are killing your rental property profit. We’ll also let you know some solutions.
So, without further adieu, here are the mistakes that could be losing you money right this moment!
1) Spending Money On Unnecessary Upgrades
If you are planning on renting long term, it’s pointless on adding too many upgrades to your property to add value. When you’ve had tenants in long enough, there will be obvious signs of wear and tear on the upgrades you did many moons ago.
Plus, the upgrades you do now, might not be appreciated in 10 or 20 years when you wish to sell the property. You’re better off keeping things simple, clean, and effective for your tenant’s needs. Overspending on upgrades is a money-wasting endeavor and reduces your profit margin on rental property.
2) Overlooking Maintenance Issues
If you don’t spend your money on fixing maintenance issues now, you might end up looking at costly maintenance fees in the future. Why? Well, when you leave small maintenance issues untouched, they can develop into serious problems.
For instance, your rental property may have a small leak in the roof. If you leave it too long, water can start messing with the internal structural integrity of the property. So if you want to avoid fees and keep the profit on a rental property, choose to fix things sooner rather than later.
3) Poor Communication With Tenants
Because many landlords are busy with full schedules these days, they can end up neglecting their tenants. This is risky behavior, as these are the people who are providing you with part of your real estate investing income.
One very easy way around this is to employ a professional property management service to handle your tenants for you. If they are professional and reputable, you can have the peace of mind you might be craving.
For instance, in the Philadephia area, propertymanagersphiladelphia.com is an excellent property management firm to check out.
4) Not Dealing With Security Deposits Well
Any landlord that doesn’t want to lose profit from rental property should pay close attention to the security deposit side of things. You need to collect a decent amount from every new tenant.
The reason is that it will stop tenants from abusing your property. And it gives you a buffer if you need to fix things that old tenants broke or mistreated.
Make More Rental Profit
If you want to make more rental property profit, follow the four tips we’ve mentioned above. Restrain from spending too much on upgrades and deal with maintenance issues early on. Also, keep good relations with tenants and don’t overlook security deposits.
For more tips on property investment and renting, go to our blog.