Rental property question

[Flymelady]

My husband and I own a 1 bedroom condo with one den. We started renting it out last year, because we got lucky and were asked to house sit for my parents for a 1 1/2 while they went overseas. I had no intentions back then of making any money from it, or being smart with our money.

Here's the deal. We rent the place out for $200 under what we pay monthly on it. I know, I know, not a brilliant move...you live you learn.

How do we make this rental property a passive income? I have looked on craigslist in this area and it appears that what we already charge is truly a reasonable price. There are places that look nicer than ours and charge right around the same amount. The only way I can think of to make some income off of this is to start charging the renter $250 more then they currently pay, which seems on the harsh side for the current renters. They are great renters, pay on time every month! Any suggestions PLEASE?!?!

In the mean while, I'm running to the store to buy Real Estate investing for Dummies, (not sure if that's the exact title, but you know what I mean)

Thanks for taking time to read
Flymelady

[mudkipz]

Have you tried posting it on real estate classifieds to see if there are any takers for the price that you want?

[Bhamhomes]

If you have a lease then you'll have to wait until the end of the lease to raise the rents. Then just inform them that you need to ask the going market rate and let them know in writing that your raising the rent. If they move out, then you can start fresh and do what you should have done in the beginning...charge the going rate.

Your missing out on building up cash flows for emergency repairs, upkeep, and cash down payments on a future purchase.

[jessiesc]

I can think of a few ways to increase your income potential:

Upgrades - Can you upgrade anything in the condo enabling a higher price?

Laundry - Many rental unit owners overlook this very easy to implement income stream. Put coin operated laundry machines in the unit if it's allowed. You don't have to charge a lot to make this revenue stream work.

Parking Spaces - How many parking spaces come with the unit (if any)? If there are 2, use one for the tenant and rent the other.

Pets - Do you or the condo association allow pets? If not, can you? Pet friendly condos can command premium rental rates.

Those are just a few.

Best of luck.

[JimLee]

There is probably a way you can turn your rental income loss each month into a gain for tax purposes.

You need to talk to your CPA for the best advice about that. If you're a real estate professional (meet the IRS guidelines), a loss can often be used to offset other income and lower your tax bill.

Is there any way to turn the den into an additional bedroom making it a two bedroom unit???

[bba001]

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