How to increase your rental income by getting the basis right?

Generating passive income is a common goal among real estate investors. And by income we mean, rental income, but it's not always easy. 

There are things about investment property ownership every buyer should know before they make an offer and settle on a property, but sometimes, the unexpected happens, and landlords lose. 

That said, there are a number of strategies investors should be mindful of that can help them secure a maximum return and avoid circumstances that can lead to financial setbacks.

Here are the two simple things any property buyer should invest in to boost their passive income from that portfolio.  

1. Hire a property manager to maximise profitability

Some landlords steer away from property managers under the impression a management service would just reduce their own income.

People think they're saving money not using a property management team, but people who manage themselves don't put a premium on their time. Also, landlords who manage their portfolio themselves don't raise rents as much as they could or should because they don’t have current rental statistic for the area or get too attached to their tenants.

Now, I am not saying that a landlord should increase their rents every 6 or 12 months as the value of a good tenant cannot be overstated or overlooked.

If a landlord is foolish enough to lose a good tenant over an extra $10 per week in rent, when the loss in income from two weeks of vacancy plus relisting fees is going to cost a lot more than the proposed rent increase, than they deserve to lose money.

What I am saying is, a good property manager will be able to recommend a reasonable increase and can even be the negotiation buffer between you and the tenant.

2. Surround yourself with a good team

A good lawyer, a good accountant and a mortgage management platform like loansHub are all essentials. There is, one other area buyer usually gets hurt when owning investment property, paying too much for simple repairs of their property’s.

You need a good handyman, a service provider you can trust, potentially someone who you've dealt with before. You want a service provider who can be your one stop shop when a tenant flags an issue with your property, you’d also want a tradie who does a quality job at a reasonable price.

Remember, you can own an average property, in an average suburb and manage it the right way and make money. Or you could own the best property in the best suburb and manage it the wrong way and lose money. With that in mind and with all the right players involved, getting the basis right is the key to stable and ongoing rental income from your portfolio.

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This article via BI does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.