How to Make Money Investing in Rental Property

How to Make Money Investing in Rental Property

Many people want to make money investing in rental property but are unsure about some of the basic concepts in choosing and managing their investment property. Here are some tips when evaluating income opportunities for residential property:

Research the real estate market

Don't purchase rental property in areas where homes are cheap and plentiful. If many homes are selling for $40,000 then your potential renters are more likely choose to buy instead of rent.

Know your target tenant

Of course you can't discriminate among potential tenants but you can choose areas and properties that are attractive to your desired demographic. For example, many rental property owners find it difficult to raise the rents of senior citizen tenants as they are on fixed incomes. Since they prefer renting to younger working families, they choose properties that are a better fit for that age group. Other property owners and landlords prefer seniors as they tend to become long-term tenants and thus reduce vacancy and turnover rates.

Maintain curb appeal

Keep roads and driveways paved, buildings painted, and the grounds well landscaped.  Give your tenants reasons to feel pride about their rentals and they are more likely to respect your property.

Remove liabilities and money drainers

Remove swimming pools, hot tubs and other costly amenities as they can significantly increase your utility and/or insurance rates.

Develop a system of quick evictions

Don't keep tenants who fall further and further behind on rents. At PMI of Houston we have a system where our rapid response to a late rent payment quickly weeds out the ones that will never pay, and motivates the rest to pay on time.

These tips were gleaned from a recent article on buying mobile home parks, but can be used by anyone wanting to make money investing in rental property.

PMI of Houston provides full service property management including move in and move out inspections, emergency maintenance and repairs, rent collection, accounting and owner reports. We do all the marketing and lease management and give your tenants online access to us 24/7. Our rates are competitive and there is no cost to you during vacancy.

PMI of Houston is a full service property management company serving Katy, Sugar Land, Fort Bend, Missouri City, Richmond, Rosenberg, and the Houston area. We offer competitive and simple flat fees with no hidden costs. Contact us to learn more about our real estate management services.