Investing in real estate is a great investment which virtually ensures profit through capital growth and of course the tax advantages associated with owning an investment property.
There are many ways in which the investor can maximise the income derived from their investment property. Most investors think that the only way to do this is by asking for or achieving the highest possible rent.
Here are the invisible ways that the property investor can maximise the income of their investment property:
First off, have an annual program of reviewing and increasing rent to a figure just below market rent. This ensures not only a growth in rental income, but by setting rent just below market rates, you ensure that your tenant’s perceived value and interest in your property and is more than likely to remain for an extended time. It also facilitates reducing the chance of vacancy and real loss of income (a non income producing asset).
Another invisible way that investors maximise their investment property income is to tailor the lease term around the peak letting times of the year. Rather than having the standard six month lease term in place, savvy investors steer clear of standard lease terms and ensure that a lease term expires in the better letting periods of the year. In these instances, should the tenant vacate the property it will be on the market in a better reletting period which in turn reduces days vacant and increases the opportunity of achieving a higher rental.