Investing in a rental property can be a great way to build equity and secure a regular income. However, there are some ways that you can get even more from your investment. There are 3 main ways that you can see more profit from your investment property. These include an increase for your rental, a rise in the property value, and revenue from business operating on your commercial property.
The Benefits of Investment Properties
There are many reasons why people opt to buy real estate. Owning property other than the home you live in can be a reliable source of income. There are also other benefits of owning investment properties, such as:
- Tax benefits
- Building equity
3 Ways to Increase Revenue from Rental Properties
If your investment property is a rental, there are some additional ways you can increase the amount of income your receive from it. These include:
1. Increase the rent
Raising the rent on your investment properties is one of the quickest ways to increase the income you get from your investment real estate property. The best way to do this is to research the market value in your area, so you know the actual value of your rental property. The trick to doing this is increasing it a small amount, so your tenants don’t move out. Try regular annual increases and include the details in your lease agreement, as this will help your tenants prepare for the rise.
2. Additional offerings
Think about ways to offer your tenants a little something extra on the premises that can also earn you a bit more money. For example, if you own an apartment building, adding a coin-operated laundry facility could be a good option.
3. Be pet friendly
Renters often struggle to find a rental unit that accepts pets. You can help them out and change a pet fee, which can help you earn a little extra on your investment property. If the pet does cause damage, you can still use your tenant’s security deposit to cover the repairs.
Property Value Increases
Not every property will see its value increase, but if your real estate does see an increase, consider yourself lucky. But, just because you can sell your investment property for a higher price doesn’t mean that you’ll be much further ahead. It all depends on inflation, which is the rate at which other goods and services have increased, and capital gains taxes.
The key to making investment properties work for you is to think long-term. It will take many years before you get ahead in the real estate market.
Commercial Businesses Income
Another way that investment properties can pay off is commercial space—for example, a hotel or office building. To get a little extra from your property, you can add some additional services, such as vending machines or paid parking garage, etc. These little perks can make your commercial space more enjoyable for guests and tenants while increasing the revenue your investment property gives you.