In this edition of my blog, I want to focus on ways to increase your income on an investment property or a note. All of these are simple to implement, and all are perfectly legal. Most all of us like the way to increase our income, and here a few ways to increase your income.
Ways to increase your income on investment properties:
1. Make sure that your rental agreement has a provision that charges a late fee if the tenant is late paying their rent- Perhaps this is something that your rental agreement already has. If it does, congratulations. Most states have a cap on the amount of the late fee that you can charge. In the state where I live, it is 5% of the monthly rent. Most tenants do not like to pay late fees so this is an incentive for the tenant to pay in a timely manner and it gives you some additional income if they do,
2. Make sure your rental agreement has a provision that charges a fee if you or your agent have to go in person to pick up the rent- While most tenants use online portals or such to pay their rent, not everyone does. Why not have a provision where you or your agent get additional monies if you have to go to the house to pick up the cash or check for the rent.
3. Have a provision in the rental agreement where you offer the tenant the option to mow the yard or you will providing mowing services for a certain price- If you are renting a home with a yard to a tenant, it is fairly common for the yard to have to be mowed. Some tenants do not want to mow a yard, and as the owner of the property you are the one technically that could be fined if the grass gets high. Why not offer the tenant an option that they can mow the yard or you will provide mowing services! Of course, you will want to make sure that the amount the tenahz nt pays you is equal to or more than what it costs you to mow the yard.
Ways to increase your income on real estate notes:
1. Have the note borrower pay the monthly loan servicing fee- If you are selling a property to a person via owner financing, it is wise in many ways for you to have the payment received by a third party loan servicer. If the note is serviced by a loan servicer, they charge a monthly servicing fee. If you are created a new real estate note, make sure that you have in the documents that they as the borrower will pay the monthly servicing fee. That might save you as the note seller at least $25 a month.
2. Make sure that you have a potential borrower pay closing fees- When you are preparing a real estate note that you are selling via owner financing, it is very important that you have the borrower to qualify for the purchase. A registered mortgage loan originator can assist you and the borrower with this process. In addition, there will other fees that will need to be paid in the sale. Make sure that you have the borrower pay for this. You are giving them the advantage of owner financing. If they were buying via conventional financing, they certainly would pay fees to lenders like Wells Fargo or Chase. This can save you as the property seller and note creator thousands of dollars and keep more money in your pocket.
3. Buy a partial note- Purchasing payments for a real estate note for a number of months (known as a partial note sale) can be a good way to increase your income or yield. If the real estate note has a long term left on it, your yield can be greatly increased where you get more bang for your bucks. Consider this as a way to increase your income.
These are a few ways to increase your income on a real estate property or a real estate note. I commend them to your consideration. Best wishes in your future real estate pursuits.- R.L. Wall
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