As rent prices continue to grow upwards of 1.0% in Maryland, those in Prince George’s County that are interested in becoming rental property owners, or better yet already are in the rental property business, should take notice.
Many property owners enter the rental market in hopes of creating a passive income to fund their vacations, allow them to quit their corporate jobs, or even pad their retirement accounts. And, while the ability to create a completely passive income in the rental property business is highly debatable, the truth is that there is a lot of money to make as a rental property owner.
Today we are going to discuss some of the best ways you can create a passive income from your Prince George’s County rental property so that no matter what your financial dreams are, they can become a reality more quickly than not.
Turning Your Rental Property into Income
1. Lower Your Vacancy Rates
One of the best long-term methods for creating a consistent income from your rental property is to keep vacancy rates as low as possible. After all, no tenant means no rent. And, no rent means you are paying the mortgage out of pocket.
Finding a high quality long-term tenant is going to be your best bet for keeping low vacancy rates. If you have an experienced property management company working for you, finding good tenants should be a breeze. In fact, as Maryland’s leading property management company, we at Bay Management Company pride ourselves on our property advertisement, tenant screening, and lease drafting procedures. Our number one goal is to get your vacant Prince George’s County property leased as quickly as possible with the highest rent payment and highest quality tenants possible. This way, should you find yourself with a vacant property at any time, the turnaround is minimal and income loss lessened.
Here are some additional tips for keeping your vacancy rates low in your rental property:
- Discuss rent increases with your property manager before implementing them
- Regularly check the rental market and compare you property’s value to others in relation to rent amounts
- Offer consistent incentives to worthy tenants
- Add extra curb appeal without breaking the bank to encourage tenants to stay
- Ensure your property management company provides exceptional customer service at all times
2. Keep Track of All Rental Property Income and Expenses
There is no way for you to garner a solid income from a rental property if your bookkeeping skills are left by the wayside. This is another reason why employing property management in Prince George’s County is so crucial to your financial success as a property owner.
All important documents related to the purchase of your property, expense reports, rent payment receipts, and any trouble you run into with your tenant that must be documented in print, email, or as photographs should be managed in an organized way at all times. This paperwork should be easily accessible and separated by property if you own more than one rental.
Luckily, our staff at Bay Management Group has expert bookkeeping skills and can do all of this for you. In addition, we are always transparent about any expenses or profits as they relate to your property and you can rest assured you will receive all of the necessary paperwork come tax time.
In the end, by staying organized you will be able to see where you can save money, where you are doing well, and exactly how to make more money from your income.
3. Renovate, Remodel, and Fix When Appropriate
There is much debate as to how much you should renovate your Prince George’s County rental property, especially once tenants are already residing in the property. However, there are some excellent things you can do to increase the value of your property fairly easily before placing a tenant (which will garner you higher rent amounts and secure more income) or even after a tenant has been placed (used as an incentive to encourage longer stays, less turnaround, and decreased vacancy rates).
Here are some of the greatest ways to improve your property to make it more valuable and worthy of higher rent amounts:
- Upgrade all plumbing fixtures to match the modern housing designs
- Increase storage areas – closest, bathrooms, and garages
- Add architectural design such as baseboards or crown moldings
- Change windows and doors
- Wash your property’s exterior
- Change the floorplan to expand on the property’s structure
- Re-caulk all pipe fittings
- Upgrade countertops, kitchen appliances, and entire bathroom
Some of these property improvements will come with a hefty price tag attached to them. However, by investing in your property to make it more appealing, the overall value will increase significantly and you will more than make up for your initial investment over the course of time in rent payments.
4. Do Not Skimp on Late Fees
Even though your tenant has been ideal up until this one time they were late on their rent payment, make sure you charge the late payment fee immediately. If you allow your tenant to get away with even one late payment, the precedent is set for future late payments and the expectation that there will be no consequence for doing so. This cycle is something that all property owners want to avoid.
One of the best ways to implement this zero late payment tolerance strategy into your rental property business is to have your Prince George’s County property management company include a very detailed late payment provision in the official lease agreement signed by both parties. In addition, this policy should be clearly explained to the tenant upon move-in so that everyone has a full understanding that the responsibility of paying on time is a serious matter.
Bay Management Group excels at the rent collect process when it comes to the properties we manage. We have no problem enforcing late payments or starting the eviction process immediately should the grace period pass. These kind of financial problems can be a headache for property owners. No one wants to enforce late fees or worse, start evicting tenants, especially if they have never caused problems before. But, if you want to ensure your income is steady, you have to do it or employ a property manager to do it for you.
5. Increase Revenue Streams
Sometimes being creative as a property owner is just the thing needed to boost annual income. During the lease drafting process, chances are your property manager is going to delegate certain responsibilities to your tenant such as maintaining the landscaping, cleaning the pool, or caring for the major appliances in the home.
One great way to ensure these tasks are being performed, take some of the load off of your tenant, and make additional income from your rental property, is to offer your tenant these services for an additional monthly cost. By inflating the price slightly, both you and your tenant can benefit. As an added bonus, you know everything is being handled according to your standards because you have hired people you trust to maintain your property.
In the end, it is every property owner’s dream to make as much passive income off their rental properties as possible. And while this may not always be reasonable, it is reasonable to expect that some additional income can be squeezed out by doing simple things such as making improvements or properly screening tenants.
If you are in the Prince George’s County area and own a rental property, call Bay Management Group today. Not only will we be able to help you manage everything as it relates to your property, we will also be able to help you boost your income using some of the strategies mentioned above. Your property will always be in good hands if you decide on Bay Management Group.