How to Earn Money as a Landlord and Grow Your Real Estate Empire

Many people want ways to increase their income, especially as the cost of living rises and wages can’t keep up. This is why side hustles are so popular, and passive income streams are very attractive, as you can earn more money without taking on a huge amount of work.

Most investments allow you to earn a passive income, essentially turning money you have into more potential wealth that can build up over time. Real estate is one of the most popular and stable investments you can make, as you can earn regular income through rent, and if you want to earn money quickly, you can sell the property and make a profit in addition to what you’ve already earned. 

If this is a path you want to take, here are some tips to help you make more money from real estate investment and specifically acting as a landlord.

Finding a Property to Buy

If you don’t already have a property that you’re going to rent out, then you need to look for a buy-to-let property. It’s important to note that what you look for in a property designed for tenants isn’t the same as what you’d look for in a property you want to live in.

You want to choose a property where you can maximize rental income, while minimizing costs. As well as the property itself, you should consider demand in that area. Look at other properties for rent and use that to determine how much of a market there is, as well as how much you can reasonably expect to get in rental income. 

You also don’t want a property that needs a huge amount of work before it’s habitable. As a landlord, you have to provide a comfortable living environment for the tenants, so you can’t expect anyone to live in a building site. As well as the costs of repairing a property, you’ll also lose more money because it’s unoccupied. So it’s better to buy a property that is either ready to move into or needs minimal work from the start.

Setting Rent

When setting the rent for your property, you have to find the sweet spot between being able to earn a healthy profit and a rent that people won’t be willing to pay. Always going higher isn’t the best option, because tenants simply can’t afford to pay rent. 

Look at other rental properties in the area of your property and work out the average rental income of similar properties. Overcharging is tempting, but unless you’re in a particularly high-demand area, people will simply find another place for a more affordable price.

However, you should also ensure that rent can comfortably cover your expenses. As a landlord, you pay more than just the mortgage amount. You also have to pay tax, maintenance fees, and additional fees for services. So work out your projected financial costs before setting the rent, then set a rent that suits. 

This can also help you work out whether to buy a property to rent. If you find that the average rent in that area wouldn’t be enough to manage these costs, then consider looking somewhere else.

Finding Tenants

So, you have a property and an idea of what you’re going to charge. What next? The longer your rental property lies vacant, the more money you lose. You aren’t just not earning money; you have to actively spend to continue paying the mortgage and maintenance costs of the property. 

So the quicker you get a tenant to move in, the better. Most people go online when looking for rental properties, so consider using a service that allows you to post a rental property for free on the most popular websites. This massively increases the number of people who can see your property.

When posting your property, make sure to include high-quality photos of the property, as well as informative descriptions so people know what they’re renting and what the benefits could be. You should also give people opportunities to view the property in person.

Screening Tenants

Finding tenants is only half the battle. You also need to think about how to make sure you get good tenants.  A good tenant pays in full, on time, all or most of the time. If they do pay late, it’s rare, and they usually tell you that they can’t pay. If you have a tenant that’s normally great but has a bad month, it’s better to give them grace and maintain that good relationship rather than burning your bridges.

A good tenant will also look after your property like it’s their own, and they will tell you right away if there’s an issue. They won’t cause needless damage other than what you might expect from wear and tear. 

If possible, ask previous landlords about a tenant to work out whether they’d be a good fit for your property. You should also become familiar with rental laws to protect yourself and your property.

Maintaining Your Property

Maintaining a property is one of the primary responsibilities of a landlord. There are a few reasons to be proactive when maintaining properties. For starters, this keeps you in the clear legally, because you have to maintain the property when someone is living in it and repair any issues.

But there’s also the fact that it’s your property and your investment. The sooner you repair any damage, the better it’ll be for the property, and you’ll be able to keep rents high or sell the property later on for more money. It’s usually cheaper to maintain than fix. Arrange regular inspections so you can make sure the property is looked after and doesn’t have any issues.

Buying Additional Properties to Let

Finally, once you’ve started to earn more, you might be in the position to add another property to your collection. This will allow you to earn even more of a passive income, and over time, you can build your earnings and asset value so that you might be able to become a landlord full-time.

To reduce the workload of this, consider using a property management company to manage your tenancies for you.