Rent helps landlords pay for the building and create income, but it takes a lot more to make sure you are saving money and getting the greatest return on investment possible. There are a few different ways landlords can cut costs. Tax deductions, maintaining the property, and starting with the best renters are a great place to start.
Taxes and Insurance
As a landlord, it is wise to seek the advice and assistance of an accountant who understands your unique situation. Tax laws can change over time, and a tax accountant will be aware of such changes. There are also deductions and credits out there to help cut what you owe for taxes. Be sure you or your accountant stay up to date on those helpful resources.
Shop around before settling on landlord’s insurance, which is basically the same as a homeowner’s policy. Insurance is a must to protect yourself and the building. Just be sure to get the lowest quote for the best coverage.
You should also require renters to have renter’s insurance. This will protect all of you and will save you money should you need coverage for an incident.
Maintenance—it is never-ending as a landlord, and that means it is ever costly. The more you can do on your own, the more money you will save. If you prefer to hire out for maintenance, try to only do so when you absolutely cannot make the repair on your own.
Keep up with regular maintenance before something breaks. Things such as HVAC systems or water softeners will run well with routine maintenance and will help you avoid emergency repairs.
Come up with a reasonable list of things you can ask tenants to do to help maintain the property. In the winter, especially, there are helpful tips to remind tenants of as temperatures drop. For example, remind them to unhook the garden hose they used over the summer to prevent it from freezing.
Choose Renters Wisely
You have the right to maintain a screening process in order to find tenants who will be a good fit for your property. The reality is that having great renters is the foundation to cut costs for the landlord. Trustworthy renters mean a better-maintained building with less damage.
Obviously, the goal is to have tenants and very few vacant properties. A vacant building is ripe for repairs, as utilities sit unused and the building itself becomes a target for vandalism. Try to keep renters lined up and use discretion throughout the process.
As you implement the different ways landlords can cut costs, stick with what works for you and add new methods as you discover them.