Education and news for smart DIY landlords!
Are you spending more than you are earning on your rentals? If your asset has become a liability, it’s time to rethink your landlord budget and find ways to keep your budget in check with every turnover, repair, and other expenses related to your rental business. Here are some guidelines:
From repainting the rental unit to marketing the property, turnover can be one of the most time-consuming and budget-sapping aspects of this business.
Focus on finding good, long-term tenants and keeping rent sustainable for them. You can also consider getting the insurance that offers guaranteed rent during those void periods.
If you’re looking into the market to buy a fixer-upper as a rental property, you need to factor in the cost to renovate. The same goes for a private property that you want to rent out. Avoid leveraging a money pit aka that property that requires a lot of maintenance in the long-term. Also, when tenants ask for upgrades like blinds, carpets, or a change of paint color in their unit, consider allowing them to make changes and pay for the materials only.
It helps to have a budget ceiling for your rental property expenses. If you have several units in your rental property, opt to use uniform flooring and paints as well so you can buy materials in bulk.
You can also get discounts if you buy from the same supplier for all your renovation and repair needs. For more savings, register a contractor account with your supplier.
Advertising a furnished property should help attract potential tenants and minimize vacancies. But you need not spend a lot of money on furniture and appliances. Check out Craigslist, eBay, thrift stores, and keep an eye on yard sales and auctions.
A lot of costly repairs can be avoided if you fix the problem before it gets worse. With that in mind, perform maintenance services every time you do routine inspections as often as quarterly.
Maintenance may include checking the pipes, electrical system, smoke detectors, air filters, security features, as well as checking for pest problems.
Ignorance of federal and state laws, as well as city ordinances, can cost you money and the integrity of your business. There is a lawsuit waiting to happen as long as you don’t actively learn and keep up-to-date with all of the laws that apply to your rental business.
From natural calamities to burglaries and fires, your pocket would thank you if have a reputable insurance company you can count on.
Seek for the most coverage you can afford, but don’t forget to ask your insurance agent how you can get a better deal on your policy. Know that new customers are often entitled to discounts. You may also get discounts when you have safety measures in place.
You may unknowingly be paying heftier taxes by not applying tax deductions. Landlords can take advantage of tax credits for repairs, maintenance, and utilities.
You can also get a tax break when the value of your property depreciates or you purchase insurance premiums or pay commissions to your leasing agent.
While low-maintenance yard work and small repairs in your rental units can be done singlehanded, you may want to leave it to the professionals when the problem is more than you can handle.
Also, consider the cost of your time as well. Busy landlords can be more effective by outsourcing to professionals when the task is beyond their expertise. Consider hiring a property manager if needed.
So what are the biggest expenses of landlords? It’s not just bad tenants who wreck the unit and delay payments. It can also be not knowing the law or leveraging tax credits. It’s not having a budget for upkeep and trying to monetize a property that requires costly maintenance.
It’s also spending too much on beautifying the unit with expensive furnishings and an array of designs and styles. With the lessons you learned in this article, you can better manage your expenses and thrive in the rental business.
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!