While the secret to success and true financial independence lies in developing a multitude of income streams, there is a fine line that, when crossed, turns financial independence and affluence into a liability. The more properties you own, the more sources of income you have, however you should not invest in new ones until you have maximized your ROI on all existing rental properties.
Failing to maximize your rental income will put you at a disadvantage in the long run, hindering your long-term growth strategy and leaving you with less money in the bank that you could have made if you had implemented these simple solutions.
Here is how to maximize your rental income.
Develop revenue sub-streams
You should capitalize on your existing properties as much as possible by offering additional services and installing auxiliary features inside and around the property such as a vending machine or a coin operated laundry machine that will not only yield more cash but will also raise the value of your property in the long run via the increased return on asset value or capitalization rate. This is a viable solution multi-family properties.
Likewise, if you are renting a single family home, you can offer additional cleaning and housing services for a negotiable fee, when the new tenants are signing the lease. Chances are that the new occupants will be happy to pay for these services rather than addressing the chores themselves.
Decrease your turnover
Frequent turnovers can significantly influence your revenue stream, as they yield substantial maintenance, advertising, and upkeep costs you would otherwise avoid if you were to have long-term tenants. Instead of losing tenants frequently because they found a better deal somewhere else, you should maximize your property’s value, and even lower the rent accordingly – it might seem counter intuitive, but if you lower the rent a bit, you will actually reap higher rewards than if you were to constantly change occupants.
Do not leave money on the table
The most efficient way to minimize vacancies on your properties is to acquire long-term tenants, which also decreases your turnover rate. That said, finding long-term tenants is not the only way to minimize vacancies. Another viable tactic is to always stay alerted and proactive by posting ads for your property the minute you learn that your tenant will be moving out. If you have a property in a desirable area, you will have prospective tenants lining up in que significantly ahead of time, ensuring that you will keep a 100% occupancy rate.
Invest in new properties
Finally, once you have maximized the potential of each existing property, you can move on to acquiring new ones. With a higher capital investment accumulated from other properties, you can search for real estate opportunities in more prominent and sought after areas that will increase value and attract new tenants organically, without the need for substantial advertisement or promotion. The premium Windermere homes for sale are the perfect examples of a lucrative investment opportunity and should be your next step towards establishing long-term success and maximizing your rental income.
As you can see, there are numerous effective solutions to ensure you are getting the most out of your rental properties, and rather than missing out on valuable opportunities, you can act on these guidelines and maximize your revenue with smart, long-term decision making and strategic planning.