7 Things Smart Landlords Do To Make More Money

Core takeaway

The video argues that rental-property wealth is not measured by monthly rent left over after bills. In its example, rent is the smallest of four modeled returns: loan principal paid down by tenants, property appreciation, tax savings, and rental cash flow. The operating tactics—screening, tenant retention, pricing, maintenance, and tax planning—are presented as ways to keep the property profitable and owned long enough for those returns to accumulate.

The seven landlord tactics

1. Screen tenants using consistent, written criteria

• Set eligibility rules before showings and apply them equally. The example uses monthly income of roughly 3× rent: for $1,900 rent, $5,700/month or $68,400/year.
• Verify income, check credit and eviction records, and contact a previous landlord as well as reviewing documentation.
• The video estimates a background check at about $40. It contrasts that with a bad tenancy involving three months of unpaid rent ($5,700) plus an estimated $3,500 or more in eviction costs—about $9,200 in the low-cost scenario.
• Keep the process compliant with fair-housing rules; written standards help document consistent decisions.

2. Keep reliable tenants when the economics support it

• Compare a proposed rent increase with vacancy and turnover costs. One vacant month at $1,900 means $1,900 in lost rent, while even half a month costs $950, before cleaning, painting, advertising, or other turnover expenses.
• In the example, a $50/month increase brings $600/year. Losing a good tenant to secure that increase may cost substantially more.
• Respond promptly to repairs, keep increases moderate, and treat tenants as customers. The video cites Invitation Homes’ lower renewal increases than new-lease increases as evidence of a deliberate retention strategy.

3. Set rent from market evidence and time lease expirations strategically

• Compare at least three similar homes within about one mile, matching size, area, and condition. Use current listings as a reference rather than setting rent based on the owner’s mortgage payment.
• If comparable homes rent for $2,000 while the example landlord charges $1,900, the $100/month gap equals $1,200/year. Pricing too high can also cost money through longer vacancies.
• Consider seasonality. The video suggests a 16-month initial lease rather than 12 months when that shifts a February expiration to June, a busier rental period.
• Check local rent-increase limits before each lease decision. The video gives California and Oregon examples but stresses that rules vary and change.

4. Charge separately for legitimate, value-linked services or use

• The example adds $35/month pet rent ($420/year), $80/month for water and sewer ($960/year), and $75/month for garage use ($900/year)—a modeled $2,280/year in additional revenue or costs no longer paid by the owner.
• Keep charges tied to something the tenant actually uses or receives, and verify local rules. The video warns against “junk fees” and cites California SB 611 as an example of regulation.
• These charges are framed as alternatives to one larger increase in base rent, not as universally permissible fees.

5. Prevent avoidable repairs and fund a reserve

• Treat major components as assets with useful-life timers: water heaters 8–12 years, HVAC 15–20 years, and roofs 20–30 years, depending on conditions.
• Use low-cost preventive measures: replace furnace filters (about $15 in the example), install leak sensors (about $20), and conduct an annual, properly noticed inspection of items such as plumbing, sealant, smoke detectors, and the roof edge.
• A rule of thumb cited is reserving 1% of property value annually: $2,500/year, or about $208/month, for a $250,000 home. This is a planning heuristic, not a guaranteed estimate of actual repairs.
• The video estimates replacing a stove and air conditioner in Columbus at about $8,000, illustrating why reserves matter.

6. Understand depreciation and the limits of tax strategies

• Residential rental buildings are generally depreciated over 27.5 years, excluding land. In the example, $200,000 of building value produces roughly $7,300/year in depreciation deductions.
• At the example’s assumed 22% tax bracket, that deduction is modeled as about $1,600/year in tax savings. The video notes that the ability to use rental losses against wages can depend on income and participation rules.
• Cost segregation may identify components depreciable over 5, 7, or 15 years. The example assigns $30,000 of components to faster write-offs; at 22%, it estimates $6,600 in first-year tax savings, before paying for an engineering study.
• The video says 100% bonus depreciation applies to eligible components for property purchased after January 19, 2025, while the building itself remains on its regular depreciation schedule. Tax rules and eligibility should be confirmed with a qualified professional.
• Depreciation can trigger recapture tax on sale. The video characterizes the benefit as deferred rather than forgiven.

7. Use refinancing and exchanges cautiously to scale

• In the example, after five years at 3% annual appreciation, the $250,000 home is modeled at about $290,000, with the mortgage balance down to about $187,000.
• A cash-out refinance at 75% loan-to-value gives a maximum new loan of about $217,500. After paying off the old loan and estimated $5,000 in costs, the owner has about $25,000 to invest.
• That amount is modeled as a 20% down payment on a $125,000 rental. The second property’s estimated $1,300 monthly rent minus $900 in payment, taxes, and insurance leaves $400/month before vacancy and repairs.
• Refinancing also raises the payment on the first home: in the example, from about $1,260 to $1,375/month at 6.5%. At 8.5%, it would be about $1,670/month, underscoring the risk of higher rates and leverage.
• A Section 1031 exchange can defer tax when one investment property is exchanged for another, subject to strict requirements. The video cites 45 days to identify a replacement and 180 days to close, with sale proceeds handled by a qualified intermediary. These deadlines and rules require professional guidance.

Example economics and modeled KPIs

The illustrative case uses a Columbus, Ohio, home bought for $250,000, with $50,000 down and a $200,000 mortgage at 6.5%. The video estimates monthly principal and interest at about $1,260, plus $390 property tax and $120 insurance, against $1,900 rent—initially about $130/month before other costs.

After adding modeled pet, water, and garage income, then allowing for half a month of vacancy and a $2,500 annual repair reserve, the video estimates roughly $390/year, or $32/month, in cash flow. These are illustrative assumptions, not a forecast.

Over ten years, the video’s model estimates:

• About $30,000 of mortgage principal repaid by tenants.
• About $86,000 in appreciation at 3% annual growth.
• About $12,000 in rental cash flow.
• The remaining amount in its roughly $144,000 total comes from modeled tax savings.
• With zero appreciation, the video estimates total returns of about $58,000 from the other components.
• At a 7.32% mortgage rate, it estimates the same initial loan would cost about $110 more per month than at 6.5%, potentially erasing much of the example’s modest cash flow.

The video’s headline totals are scenario calculations, not guaranteed investment results; they depend on assumptions about costs, tax treatment, appreciation, financing, vacancy, and property condition.

Practical playbook

• Establish written screening standards before advertising.
• Compare local rental listings and check relevant laws before setting rent or fees.
• Weigh the cost of tenant turnover against the benefit of an increase.
• Budget for vacancies and long-term repairs rather than treating all rent collected as profit.
• Review tax and financing decisions with qualified professionals.
• Stress-test refinancing at higher interest rates and do not assume appreciation or easy access to credit.

Presenter and sources

Presenter: Not named in the subtitles. Channel: Ned Talks Business.

Sources cited in the video: TransUnion and TransUnion SmartMove; Princeton’s Eviction Lab; Invitation Homes; Zillow; Apartment List; the American Pet Products Association; Fair Housing Act; California AB 1482 and SB 611; Oregon rent-increase rules; Real Cost IQ; BDO; Fannie Mae; the IRS and Internal Revenue Code Section 1031; and Freddie Mac.