Many landlords today are basking in the glory of a market with both high demand and high returns. But, one should still be sure to cut costs wherever one can to make your business the most profitable it can be. As landlords, you should be saving money not just by purchasing properties that can easily generate revenue but also by taking a look at the different ways in which you could be reducing your out-of-pocket costs. While some strategies go against the grain, others will work very well.
Apart from the common personal saving strategies adopted by the landlords, there are also some other strategies that you can follow according to your rental portfolio, the local real estate market, and where you reside. Here are few strategies to save money as a landlord.
• Reduce turnover by keeping rent low
If you keep the rates of properties slightly lower than the competitors, you will always remain 100% occupied, have numerous applications whenever there is a vacancy, and also save money along the way. Whenever someone moves, it costs the landlords a pretty big amount as they not only have to clean the carpets but they also have to leave the property empty until they can find a new tenant. This can mean a month with no rent or longer. Both in terms of money and time, it can be pretty costly to market a property for rent.
• Smaller real estate properties are easy to repair and upgrade
Smaller rental properties are cost-effective and when they’re within 1000 square feet of size, you will be easily acquainted with the costs of the carpet, the size of the furnace, and the size of the roof. If you don’t want to pay for huge repairs, it is always better to go for smaller real estate property. You don’t have to pay for bigger items and bigger repairs and the property taxes and homeowner’s insurance costs will also be lower.
• Avoid using a property manager
Property managers usually reduce the stress associated with being a landlord as they usually promote and endorse your rental and take good care of vetting potential tenants. They even meet with renters, collect payments and deal with other issues regarding tenants. It is however sad to note that these services usually come at a hefty cost. So, if you want to save money, you have to do away with the services of a property manager. This way you can keep more profits for yourself and your business.
• Be specific about flooring and paint colors
Expert real estate investors use a simple trick to streamline the entire vacancy process. Landlords usually use the same interior style and paint for their rental properties. When you do this, you can buy the same paint color in bulk and this even saves your time during turnovers. You can save up to $250 to $500 every time painting.
Therefore, if you’re a landlord who is reading this post, make sure you follow these points to save money on your rental real estate property.
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