Imagine having your mortgage pay itself. You could save thousands of extra dollars per month, and you could even use this money to purchase an additional property. Establishing passive income is one of the many reasons why 91% of Americans claim they want to own a home someday.

To make the most of your rental property when investing in real estate, there are certain management tips you should keep in mind. We've put together a brief guide on investment property management that can take your performance to greater heights and maximize your investment. Let's explore the key information you should know.

Screen Your Tenants

A major issue investment property owners experience is choosing the wrong tenants. Allowing the wrong people into your home comes with many consequences, such as property damage and missed rental payments.

In some cases, it could even put other members of the community at risk. Before renting to someone, it's best to consider their rental history, credit history, criminal history, and monthly income. If you own a property in a desirable area, there should be no shortage of applicants.

This means you won't have to settle for subpar tenants to avoid vacancies. Take your time when vetting applicants so you can make a decision that won't come back to haunt you.

Set Rent Appropriately

Vacancies cost thousands of dollars per month. Extended vacancies can easily lead to financial distress. Always set your rent appropriately.

No matter how attractive your property is, people will likely pass up the opportunity if the rent is too high. Look at similar properties in the area and see what their rates are. You may have to price your home higher or lower depending on certain factors.

For instance, let's assume most homes in the immediate area are a similar size to yours. However, your home has more amenities. You can likely get away with setting rent a bit higher than your competitors.

The inverse is also true. If your rental property can't quite compete with similar homes, consider setting your rent lower than average.

Market Effectively

Many people overlook how important property marketing is. There are likely dozens of available rental properties in your area, meaning you'll have to stand out to attract tenants.

Leveraging online ads and social media is a great way to increase your number of applicants. Digital marketing is also highly cost-effective. You won't have to spend much money to generate interest in your property.

Prioritize Property Maintenance

Under no circumstances should you neglect maintenance. This comes with numerous consequences that can be difficult or impossible to deal with. For example, neglecting a property could lead to substantial damage that you might not have the money to fix.

If people currently live in the home, overlooking maintenance issues can come with legal complications. If they take legal action against you, you'll need to budget for lawyer fees and a potential settlement.

As soon as you learn of an issue, contact a reputable contractor to take care of it. Never cut corners when hiring professional help. You often get what you pay for regarding home repair.

Choosing the cheapest options will likely fall short of your goals and cause additional issues. For example, let's assume that a home has electrical problems, and you hire an inexperienced contractor to save money. After the project, electrical issues that were overlooked could cause a fire.

Upgrade Your Property

Making property upgrades can substantially improve your property's value. It can also make it more attractive to potential tenants.

People love to see remodeled bathrooms, new kitchen hardware, and similar projects. Although remodeling costs money up front, consider it an investment in your home.

It's also worth noting that making renovations allows you to increase your home's rent. If you set the right price, your projects can quickly pay for themselves.

Hire a Property Manager

One of the best ways to streamline property management is to hire a property manager. These firms have the tools and resources to overcome common issues. They can also help you get more money out of the properties you own.

The best property management companies will have a strong online presence and put their clients first. Ask about how they handle nuances like tenant screening, maintenance requests, and rent collection.

Inquire about their compensation, as well. Property managers often take a percentage of rental income as payment. Don't make your decision lightly, as this could affect your home's profitability.

Choose the Right Property

Not all types of properties will meet your needs. Some are also easier to deal with than others.

If you're looking to maximize your income, single-family homes are likely your best bet. These tend to be the most popular options regardless of the market's location or conditions.

It can often be difficult to find the ideal options. Working with an experienced agent goes a long way toward getting the keys to the best property for your situation. Find an agent who has plenty of experience working with clients like you.

Their primary demographic should have similar incomes and goals. They should also have a strong industry reputation. It's best to hire an agent who quickly gets things done the right way.

Ask what their proposed marketing strategy is. Agents don't always have a massive list of leads to work with.

They'll need to get your property out there effectively to find potential tenants. As long as you do due diligence, you'll find the right agent for your situation.

Don't Neglect Investment Property Management

Without the right investment property management strategy, you risk falling short of your ambitions. The tips in this guide will allow you to avoid obstacles you may have otherwise encountered. From here, you'll likely be surprised at how much additional money you generate.

Sotheby's International Realty strives to connect our clients with the perfect luxury property for their needs. Our professional agents are accessible and experienced, allowing you to get the best results. Reach out to us today to learn more about how we can help.