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What’s Keeping You From Profiting On Your Rental?

Renting out property can be one of the most reliable and profitable long-term investments that most people can readily access. People always need a place to live, after all, and the trends suggest that the number of renters is going to keep increasing. However, your reality might not fit the expectation and you might find that your property isn’t the money-making machine you hoped it would be. What could be the cause and what are you able to do about it? We’re going to look at a few of the reasons now.

You aren’t advertising well enough

One of the biggest reasons for loss on a rental property is vacancy. If you don’t have anyone in there, it’s obvious why you’re not making a profit, but have you considered why you don’t have any tenants in the first place? Advertisement could be a huge part of it. A lot of landlords will just stop at one listing when it comes to getting the word of their property out there and wonder why interest is so slow. It only makes sense that you should advertise as wide as possible, and handy listings like those at www.Landlordology.com make it a lot easier. Ensure you’re taking high-quality photographs with good lighting to really get the image of the property across, as well.

Ask why else you might be vacant

Poor advertising isn’t the only reason you’re not getting any tenants. Take a closer look at the rent you’re charging, and you might be more like to discover the reason. Ensure you are doing your research on other rental properties in the area when you decide on a price. Bear in mind that it’s not just about where you are but what you offer in that area, too. If you’re charging the same amount of rent for a two-bed as someone is charging for a three-bed, that could cause some issues. Think about what features are included in your property compared to others, too, such as a garden, parking space, proximity to public transport and so on.

You haven’t vetted your tenants

Turnover is Just as bad as vacancy. If you continuously find yourself welcoming new tenants only to have to say goodbye to them before long, that means you have to keep spending time and money looking for new ones. When talking to tenants, you want to ensure you’re choosing the ones who are most likely to stick around for a longer time. You also want to make sure they’re able to reliably pay on time and that they’re not about to cause any trouble that can cost you money. Tenant checks as shown at www.MoneyCrashers.com can help you spot some of the red flags that show a tenant might be more trouble, and more costly than they are worth.

You’re not providing extra services

Landlords that are willing to be a little more active in how they earn money could stand to earn a little more, too. This won’t be a particularly easy option for those who already have other occupations or responsibilities that they have to share their time with, but some landlords will offer extra services to their tenants for an added fee. It could mean offering some cleaning services, gardening, landscaping, or even plumbing if you’re a licensed plumber. Not only do you get the opportunity to make some extra money, but you’re playing an active role in keeping your property in good condition and cutting down some of the hassle that can come with the end of tenancy cleaning.

The property just isn’t that attractive

It’s a big cause of both vacancy and turnover. If the property is looking a little worse for wear and it hasn’t been updated in years, then it’s less likely to attract tenants and those already in it will fall out of love with it more easily. Too many landlords will go as long as possible without updating a property because it just seems like too much work. However, with services like www.Schemel-Tarillion.com, it’s much easier to just let someone else with a more practiced eye for renovation take the lead. Think of it as adding to the investment. Tenants aren’t only more attracted to properties that get somewhat regularly updated, they’re likely to pay more for them as well.

You thought it would be passive income

Unfortunately, one of the biggest facts that people tell prospective landlords about renting out property isn’t so much a fact, but a major misdirect. Renting out a property isn’t passive income. It might not require your attention every single day, but you are going to have tenants who will always need one thing or another, whether its fixes to a certain part of the home or otherwise. If you’re not willing to treat it as a business you have to spend your time with, you will end up with dissatisfied tenants and a higher turnover. Some may choose to rely on an agency to handle property management, but this can be a cost that cuts deeply into your profits.

You’re not doing the math

If you really want to know why your property isn’t as profitable as you hoped it would be, you have to ensure you actually know how profitable it is in the first place. Don’t make assumptions, sit down, and do the math. Rental property management software makes it a lot easier to not only handle the administrative sides of being a landlord. Those software suites also often include budgeting and cash flow displays that allow you to see exactly how much you’re making, factoring the ongoing costs into each month. See where your costs are starting to add up and whether or not you can think of a long-term situation. For instance, if the heating system in the home is always on the blink and demanding repairs, could a replacement save you money in the long run?

You’re not increasing rent strategically

Perhaps the property is fine, it’s in demand, it has tenants in there, and those tenants are reliable. Is it still possible to miss out on profit? Of course, it is. The rent you set when you first welcome tenants should not be the same amount you’re charging ten years down the line. Inflation can make that much less profitable. Over time, make strategic rent increases, using resources like www.RentOMeter.com to keep up with the market. Of course, you have to ensure that there’s enough demand for your home that any rent increases aren’t going to dramatically affect its likelihood of getting and keeping tenants. Not every property can take a rent increase even when it’s needed.

Don’t tolerate lateness

Every time a tenant is late with rent, it directly impacts your bottom line. You may have the continued costs of investing in the home, including paying off any home loans and taxes but without the capital to do it. Over time, this can leave a lot of landlords in debt. Use the sample late rent notice at www.landlordstation.com and get used to sending it out as soon as you realize rent isn’t in yet. The management software mentioned above makes it a lot easier to track when rent is due, when it’s late, and when it’s paid.

Don’t forget the fees

It’s much better for you if your tenants are never late with their rent payments. That should go without saying. But when they are late, you have to make sure that you’re letting them get away with it. Every late payment can cost you money, as the costs of managing the property keep rolling on. So, ensure you recoup those costs from the tenants. How much you charge in late fees is down to you, and you don’t want to charge too high as to be unreasonable. But they should be enough to serve as a deterrent to future contract breaches. Don’t be flexible on them, either. Tell your tenants in a letter about the late fees, and that they are to be paid alongside the rent. Don’t accept the fee payments without the rent and don’t accept the rent without the fee payments, and don’t tolerate excuses.

You’re not good to your tenants

Your tenants are your livelihood and your property is your business, yes, but don’t forget to treat them like they’re people, either. Having a good relationship with your tenants is, in most cases, likely to make them more concerned with paying on time, treating the property well, and giving you advanced warning if there are any issues that can impact rent. What’s more, good landlords see less turnover. Some landlords think that ruling with an iron fist is the only way to keep tenants in line, but more often than not it makes them more likely to spite the landlord and leave.

As the points above show, there are a lot of ways to get renting out property “wrong”. Landlords and landladies need to put some real thought into how much money they’re making from that property and put in the work to make sure they’re not getting short-changed on their investment.