Being a landlord can often be quite the financial challenge, while also being a great source of income. If you are a landlord, or you are looking into becoming one, owning income property comes with its benefits, but it has its costs, too. It always helps to know a few tricks to gain the most out of being a landlord. To help save and make money, rather than splurge and lose it, here are three smart money moves you should make as a landlord.
Switch to digital
With everything going digital nowadays, free landlord software has become an easily accessible and efficient way for landlords to manage their property. With these technologies made specifically for landlords and tenants, you can easily maintain required tasks such as listing properties, screening tenants, and dealing with maintenance requests. Landlord software’s allow you to publish and advertise listings, find and screen tenants, and manage rentals all in one place.
These technologies also save time and expenses, allowing you to manage your business without being weighed down by an ever-growing list of things to do. Eliminate infinitely long spreadsheets, piles of receipts and boxes overflowing with folders by keeping it all in one place. Plus, landlord software is a great way to get exposure for your listings, and to connect with other landlords and tenant prospects.
When investing in property, research the best types of property and how they sell on the market. See what interests people more, as well as how you can use the property to your benefit.
When it comes to vacation rentals, look at what tenants want. These days vacationers look for other options aside from hotels. Experience is part of the vacation, and so more people opt for places where they can live like a local, be it in a city or the countryside. That said, renting out vacation rentals are an opportunity to furnish the property, and rent out to short-term tenants. Not only will you be able to invest in a high-demand market, but you’ll also have the option to use the property yourself, between the times tenants rent it out.
Investing in apartment buildings also comes with the opportunity to make extra money. With apartment buildings, you have the leeway to use the building for your benefit, such as installing cell towers and billboards, or installing coin-operated vending and laundry machines. This results in extra rental income while not violating the tenants’ property usage.
Prepare for Income Tax Season
Taxes are a serious business when it comes to being a landlord. Operating rental property costs money, which means lots of tax deductions comes with it. However, you can use these to counterbalance rental income.
Take advantage of investment property deductions. Keep track of receipts, and have an accountant or tax professional to help you figure out what expenses to consider current or capital. Current expenses include things such as new paint or door handles while capital expenses are on a larger scale, such as installing a new furnace. This way, you will be able to ensure that you receive all the refunds and deductions possible, saving you money and avoiding any financial issues.
Setting up LLCs for each property also offers tax advantages, such as pass-through taxation. It also helps to protect your personal assets from any rental-property litigation.
Being a landlord comes with its challenges, but it also has lots of benefits. As long as you are prepared and understand the risks, renting out property comes with great profits and is a rewarding job in the end.