How to increase your earned rental income

www.levelupmanagers.com 

What are good ways to increase the rental income produced by a property? There is many types of investment properties depending on the main goal of the acquisition. There is also multiple ways to increase the earned amount of rental income. There is short-term rentals, mid-term rentals and normal yearly rentals. We will take the time to break multiple ways down. 

The numerous types of investment properties are related to the intention when the real estate investment was made. There is many reasons why a property is acquired. There is properties acquired for vacations or to live in when their area gets colder ,investment properties purchased to enjoy rental income and value growth or multifamily properties acquired to reduce the monthly expenses of a home. The last group often acquire 2 to 4 units properties. They live in one and rent the others. The result is to use the rental income to lower considerably their monthly expenses. Some people want to enjoy a combination of many reasons. That is what made short-term rentals very popular for some people in the beginning. As short term rentals gained in popularity for many reasons and the amount of clients willing to pay to stay in them grew, the generated income they provide also grew. 

In the Miami area, there’s many advantages that are making the rental income grow but it is expensive to acquire any property. It is one of the most important area in the country for different businesses. It also has the warmest climate in the entire country. That is why it is one of the best cities to invest in a property to be used for any type of rental. There is many different types of clients and most people can’t afford a property in such an expensive area. 

A way that is known but might create some fears or expose a lack of knowledge is short-term rentals. These can be in any type of properties. As an example, let's say you own a multifamily building and in this building you have an apartment available for rent at the price of 1800$. After waiting multiple weeks, knowing that you are in an area loved by tourists, you decide to turn this apartment into a short-term rental. One of the reason why multiple property owners do not take that direction is because before seeing any income, you must start by making expenses. Firstly, you have to furnish and decorate the entire apartment. Afterwards, you must hire a cleaning lady for cleanings every time a guest leaves and before another one comes in. You can now place the apartment on multiple short-term rental platforms like AirBNB, VRBO, Google Travel, Expedia and more if you have a good manager able to maximise your income without any double bookings. Then you will come up with a daily rate after comparing what you offer compared to other rental properties. Let's say you come up with a rental rate of 150$. Calculating your monthly expenses, like your cleaning lady and the maintenance, you calculate that you will make more than a monthly rent after all of your expenses by being booked for only 16 days! The other 14 or 15 days available in most months will only grow your profits. A good short term rental averagely is booked for 21 to 23 days in a month. You will make 3150 and 3450$. Which means after paying your cleaning lady 500$ per month and putting away 100$ a month for maintenance, you will keep between 2550 and 2850$ every month which is  betwwen 750$ and 1050$ more or betwwen 9,000$ or 12,600$ more yearly than you would've made by renting it normally with a yearly rental!

There is another way that is not talked about and it less known. This way is mid term location. This way needs more work to obtain but less management than short term location. It produces more income than long term rentals. The main clients are people going through difficult situations. These people often have main properties but are not able to remain in them due to current circumstances. Examples of these often difficult situations are a person that accidentally goes through a fire inside of their house, a victim of home robbery, experiment a big and dangerous accident with physical damage, these unplanned and unpleasant events happen more frequently than we realize or speak about. While the house is being restored, repaired or renovated, they need another place to stay for several weeks or months. In that type of situation, the person will get in contact with their insurance company to explain the situation to get needed assistance. If they have a good insurance coverage, the company will find a property for them to stay during their difficulties. 

The people who are owning or managing this type of rental properties need a good relationship with multiple insurance companies. There is numerous advantages in owning a mid term rental property. The income is better than long term rent because the payment is provided by insurance companies. You can choose to make the property available or unavailable depending on the occupancy, your needs or your desire. The management task is often less demanding than a short term rental because these occupants already have habits, a way of life and good knowledge about what is available in the area contrarily to vacationers who often discover what to do. The needed assistance and management is often way more work to help guests get their desired outcome depending on the situation. 

The great thing is now there is management companies who specialize in any type of rentals. Level Up management is exactly in that category. We have the experience and great ability to manage these three (3) types of rental properties. There is many things that differ and knowledge to have to efficiently manage a short term or a mid term rental property. Different types of guests have different needs. That is why knowledge, working ability and management capabilities are so important. 

There is a type of mortgage loan used to acquire properties that provide more rental income than average called a DSCR loan or a debt service coverage ratio loan used for investment properties that provide rental income. You will obtain all the needed information from a good mortgage broker. 

The role of a great management company is to provide the assistance, the needed support, the maintenance, the cleaning services and do their best to provide the guests a wonderful stay. At the same time, they provide the assistance and a guarantee to the property owners. The fulfilment of all these important tasks will increase your earned rental income, will provide a great expense to reduce your tax expense and will provide the opportunity to enjoy more of your free time and grow your real estate portfolio. 

Our main goal is to give you the ability to grow while enjoying some freedom! 

www.levelupmanagers.com