Proven Ways to Increase Your Landlord Revenue
The purpose of renting out a property and being a landlord is to make money. Short of buying more properties and investing even more cash and time, you may wonder how you can continue to grow your income. The obvious answer is “raising the rent” but that’s not the only option and it’s not always the best way.
If you’re looking to make more money without spending a lot to do it, here are a few options you should consider.
Lower Your Vacancy RATE
The simplest way to keep the cash flow moving in a positive direction is to have fewer vacancies. Long-term tenants are often the goal, but to get them you need to offer a competitive rent, a good property, and plenty of communication. When the inevitable happens and they put in their move-out notice, don’t wait until they leave to start looking for new tenants.
Market vacancies as soon as you can and use checklists and help to turnaround the property faster. This will keep the rental income flowing and increase the money you make over time.
Maintain Market Value
Raising the rent is the obvious choice for making more money, but you have to be strategic about it. A huge price jump just because you want it could drive your current tenants out and make it harder to find a new tenant. Small increases of one to three percent are much more reasonable and easier for tenants to accept.
Pair a rent increase with an upgrade in appliances or some other improvement so your tenants feel like they’re getting something in return. You can also use a vacancy to do a larger upgrade and justify an even bigger increase in the rent for new tenants -- as long as it’s competitive with the local rental market.
Enforce Late Fees
There’s nothing wrong with being kind and forgiving a late payment because a tenant had a death in the family, a family emergency, or some other rare situation. But not enforcing late fees consistently means two things -- you’re teaching your tenants that it’s okay to break the rules, and you’re making less money over time.
When someone pays late, charge the late fee. Hold them accountable and you’ll either weed out a bad tenant or you’ll receive payments on time. Make sure paying the rent is as easy as possible. If the only way a person can pay is to mail you a check or bring it to you, late payments will be inevitable. But an online payment system means people can pay wherever they can get online and at any time of day.
Add-Ons That Create Value Create Revenue
This requires thinking out of the box a little, but with a bit of creativity and negotiation, you can increase your annual income.
Offer a valuable service like landscaping or housecleaning for an additional monthly fee. Negotiate a lower price with the service provider and pocket the difference. Make sure it’s a good, reputable company to avoid future problems.
Add conveniences like babysitting services, dog-walking, pet-sitting, and other small things that people will need occasionally. Be the go-between just as you do with housecleaning or landscaping services.
And yes, buying other investment properties to rent out can be an additional source of revenue. This is a long-term strategy that may cost more money upfront, but if you’ve got the time, the money, and the energy, you’ll increase your income over time.
Offer Furnished Rentals
The upside to renting out a furnished home is that you can often charge higher rent. The downside is that these tend to be shorter leases. You don’t need to offer fancy or new furniture. Buy what you need from local thrift stores or consignment shops for much less -- just make sure they’re in good condition.
As long as your property turnaround process and marketing strategy are efficient, shorter leases don’t have to be a money loser. And if your local rental market is competitive enough, the increased rent you charge may make up for any additional vacancies.
Hire a Property Manager
Yes, property managers charge a fee to work with them, so you may wonder how hiring one will help you make more money. Good property managers reduce tenant turnaround, pre-screen your tenants to find the best, perform all background checks, deal with payments, problems, and emergencies, handle the eviction process, and keep you legal. They take on most of what you need to do as a landlord.
When they do, that frees you up to focus on other things, buy more properties, and find other ways to grow your income. At the same time, they also make sure you’re not wasting or losing money in your rental. A little extra money spent each month can be a great financial investment for your future.
Want to make more money with your rental? Need help? Work with ERA American Real Estate and let us help you increase your income.