Buying a new apartment or house for sale in warangal real estate rental can bring you additional income without exponentially increasing your taxes.

Rental investment is an appropriate solution to increase your assets and, at the same time, increase income . It is also an ideal solution to build up additional income when you retire.

How to optimize your rental income? How to get the most out of your rent? How to best fix the amount of the rent ?

Do work

Carrying out renovation work is a coherent and efficient way to perpetuate the heritage value of your asset and to perpetuate the quality of the rental income that results from it. 

The investor aware of this solution will acquire a property whose value is degraded and will renovate and rehabilitate it to meet the needs of the tenants constituting the demand on the market. These maintenance, repair or improvement works remain dissociable from construction, reconstruction and expansion works, the costs of which are deductible from property income , and constitute a pass to lower taxes . This tax reduction will be correlative to the marginal tax bracket of the purchaser.  

If, for example, you spend the sum of € 10,000 on work, this is equivalent to € 10,000 in non-taxable property income at the property income tax rate which differs between 17.20% and 62.20% .

Tax exemption for your work will allow you, for a number of years, to reduce the taxes you will pay on your rents .

Calculate your profitability

In rental investment, profitability is generally the sinews of war.

The following factors should be taken into account when calculating the profit of an investment:

  • The acquisition price
  • Maintenance costs
  • Management fees
  • Miscellaneous charges : (property tax, trustee fees, rental vacancy, insurance, etc.)

In the end, we speak of a rate of return which is calculated as follows:

[(monthly rent x 12) – Property tax – Management fees – other charges] / Acquisition price

Calculating the profitability of an asset can help you make a choice on a new acquisition. It is a decisive criterion in the purchase of real estate since it will be your return on investment. This can guide you in order to maximize your rental income.

Avoid rental vacations

The second lever to increase your rental income is to reduce your rental vacations . The more you anticipate the departure of your tenants , the lower your rental vacancies will be, thus limiting economic losses .

For this purpose, in particular, you can use virtual reality technology to conduct online pre-tours. This allows your future tenants to have virtual access to your accommodation (apartment or house) from the first day of notice without disturbing the outgoing tenant.

Avoiding rental vacations also means making sure you rent your accommodation at the best times . Overall, it is preferable to rent your accommodation between the months of May and October . Most tenants at this stage are young workers or students preparing for their return to school. At this level a great offer is to be filled!

Correctly estimate the amount of rent

The third important factor is the price of the rental rent . Indeed, many parameters must be taken into account to find the best rent.

If the latter is too low, the housing will lose its potential for rental income. But be careful, do not be too greedy, too high rents can lead to rental vacations , which will again lead to loss of income.

You will understand that a rent that is too high will scare away your prospective tenants and a rent that is too low will make you lose profitability.

For this it is essential to take into consideration several elements of your rent estimate to establish the right amount :

  • The rent control
  • Your internal equipment (TV, kitchen, household appliances, etc.)
  • The location of the property
  • The building equipment (digital lock, concierge, elevator)
  • The economic situation of your rental market
  • Proximity to amenities

All of this will help you set a fair and optimal rental price, while remaining competitive. At the same time, comparing your real estate asset with other ads on sites like Seloger or Leboncoin or in a real estate agency will give you a good price range.

Be aware that some real estate agencies can help you in this process to set the best rent.