Now you have your rentals, the key is to find ways to save money or generate new revenue streams through your tenants. This can be by finding ways to leverage your skills and your renters money. Consider the creative strategies below to make more money from your rental property.
1. Be Your Own Manager
When you manage your own property you profit from your savings. Managing your property can be done from anywhere in the world through your cell phone. Provided you have the time to adequately handle your property you will be saving yourself from spending quite a bit of money (around ten percent) by being your own manager rather than hiring an externally. Hiring a property manager to get a tenant can cost you close to a month’s worth of rent, which is 8.3% of revenues and then add another 10% a month for their ongoing services! You will make more money than hiring a property manager without having to lower your rental rates.
2. Do Your Own Maintenance (As Much As You Can)
One of the several benefits of living close to your property is having the option to do as much of your own maintenance as possible. Maintenance shops get $50+ per hour which is often actually over $100 per hour! If you can fix items at your own home, you can fix them in a rental. It’s best to start by verifying the problem before calling someone to repair it. This is easily done by asking your tenant to send you a video or photo of the problem at hand or simply by stopping over to see it with your own two eyes before anything else. Troubleshooting and fixing the small stuff can save thousands in the long run especially when it comes to repair costs.
3. Avoid Vacancies
No one cares more about renting your property than you do. The rental market is very strong and the free online marketing tools are plentiful. If you live close to your rentals, consolidate your showings to only a few times a week. If you don’t live close to your rentals, try to line up your showings to be about 20 minutes apart with the objective to get your place rented in a day. Also, to be super efficient, make sure your applicants confirm they are pre-screened prior to their showing. If you are concerned about finding renters, you can always increase demand by lowering price or by increasing your free marketing tactics.
4. Coin-Operated Laundry
In a multifamily building, adding coin-operated laundry facilities is easy money and makes it better for your tenants. Even if you have built-in apartment sized laundry equipment, you can provide larger machines in a common area for an added price. It is always best practice to keep your coin-operated laundry equipment working properly. Keep in mind, quality tenants will list in-unit laundry as their top rental amenity. Many will not even consider a rental without a washer and dryer in-unit. Laundry can help you raise rents, attract better tenants and expedite the process of renting your unit.
5. Implement Pet Fees
Adding extra pet deposit and rent, such as an additional $25 per animal, will greatly increase your revenue. Pet owners prioritize their pets and are more than likely willing to pay the small extra deposits and monthly fees to ensure their pets are by their side in their new home. Plus, when you get to know your renter’s pets you are taking that extra step to making them feel comfortable. Ask for their pet’s name when discussing these fees, this will make the conversation feel more personable and oftentimes the renter will focus on talking about their pet rather than the fees at hand.
6. Sell Partial Months – Prorate
Typically, when a tenant moves out they leave at the end of the month. However, renters often prefer to move to their new place ahead of their move out date to give themselves time to adequately move and tidy up before turning in their keys. The key here is to sell any remaining days in a month by offering to prorate. Think about it this way, wouldn’t you rather take a two week vacancy rather than a month to not lose the renter? You not only will get additional rent, the renter gets time to move and clean out their old place at a more relaxed pace and oftentimes your tenant will get cheaper moving trucks and should be able to get all of their deposit back from the old place with the extra time for cleaning. It’s a win, win, win! Note, it’s beneficial to have your rent due on the first of the month, this keeps finances organized and alleviates less room for errors when it comes to move out time.
7. Supply Furniture
Renters, especially those with short-term leases often look for places that are already furnished so they can move in and start living right away. Taking the time to furnish your rental property with practical furniture is a necessity that many landlords overlook. As a landlord, knowing your market and being willing to offer a fully furnished unit is sure to set yourself apart from your competition. Note, adjusting your rental rate for both furnished and short term are essential for your profit. Be sure to note both features prominently and toward the top of your rental listings to catch the eye of your target tenants quickly.
8. Offer Satellite TV
If you, yourself have satellite TV, be sure to let your new renter know they will receive your referral code prior to them moving in. This not only is a good talking and selling point but it will also benefit you by getting discounts on your own TV service, in turn your renter will get a great deal too. Plus there are ways to make additional money from larger apartments units through exclusive provider contacts and reselling the satellite or TV services, be sure to ask your TV provider how you can reap the benefits. If you offer a “free” wi-fi service in your rental listings, this will help your rentals get rented and may also be a way to increase your rental rates.
9. Get a Real Estate License
Why stop at being a landlord? Getting a real estate license can be extremely beneficial, especially to your wallet. You can guide your tenants into being homeowners by being their realtor. Your tenants can send you referrals too! Extending the option of easy lease terminations and monetary bonuses when they close with you is a nice benefit to incentivize your tenants to use you as their realtor. Plus, factor in built-in discounts when you buy additional properties, and you have another cash cow.
10. Make Your Own Keys
It’s financially beneficial to have your own key maker and make your own keys in addition to charging your renters for additional keys. Having your own key maker saves you time and money from having to deal with trips to getting additional keys made during their office hours. You now have the freedom to cut keys at your convenience and on your dime. Note, having the “Do Not Duplicate” key blanks are a great way to make sure your renters aren’t handing out keys left and right. Plus if you have a Schlage SC-1 keyway lock, you can rest assured knowing your locks are secure.
11. Implement Lease Termination Fees
Life happens and in turn unexpected lease terminations also do. It’s best practice to have a lease termination clause included in your lease agreement. It’s always best to have anything and everything prepared upfront to prevent any chaos and misunderstandings on the backend. Oftentimes there are specific parameters required when it comes to lease terminations including written notification and a specific number of days still legally responsible until the actual termination goes into play. Example, written day notification and a 60 day legal responsibility from the day of notification. This will allow you 60 days to re-list the property as well as plan for it to be properly turned for your new renter. This protects you from having an unexpected vacancy and losing money. Oftentimes there is also a financial penalty such as 2 months rent. This is to ensure you get the money you were promised at the lease signing. However, if they are buying a home and are using you as their realtor it’s best practice to waive these lease termination fees.
12. Holding Fees
Requiring secured finances to hold anything off the market is a great idea for both you and your tenant. If this process is done automatically online, it’s very efficient because this way you don’t have to worry about any cash or check transactions and this deposit or money down will be documented. This is great if some of the money put down upfront is to be used toward their move in money. This is especially great if an applicant is declined or does not pass a background check because they will have their payment returned to them through the online system used so neither of you will have to encounter an unpleasant transaction together. Plus, if a tenant knows they have to put money down upfront for their application or screening they will more than likely be a quality applicant.
13. Collect Application Fees
Do background checks on all your rental applications. Yes, it does cost you money but this is money well spent. Applications come in all shapes, sizes and costs especially if your applicant lives outside of your state or country. More than likely you will want an application that includes credit reports, past landlord checks, employer checks, and county level criminal checks for all states the applicant lived in for the past seven years. Note, this is to be for each adult leaseholder.
14. Enact Extra Occupant Fees
All occupants of your rental property are to be on the lease documents. Note, if anyone is taking residency in your rental property that is not documented, it is breaking the lease agreement. It’s best practice to have all occupants, minors included, on your documents. This comes in handy for schools and emergencies. As for adults, anyone over 18 should pass a background check as well as have an approved and completed application for your rental. Be sure all of your rentals abide by the same procedures to eliminate any favoring or discrimination. Some landlords raise the rent per additional occupant, for example $50 extra per month per occupant over 18 years of age.
15. Put in Vending Machines
Vending machines, gumball machines, etc. in a multi-family property can be a great additional source of revenue. Having these machines by your coin operated laundry is a great idea! Note, making sure your machines are in good working condition and are stocked are always best practice. This will keep your tenants happy and coming back for more.
16. Offer Additional Storage
People love their things and people love having a place for their things especially if it is close to home and budget friendly. Having a shed installed in your rental property’s backyard or adding a garage might be a nice addition to add ‘storage availability’ to your rental property listing. This is especially great if your property doesn’t have an attic or a basement.
17. Utilize Your Land
Does your rental property sit on a nice piece of land with a view or on a farm? If there are features to your property that are available to host events or rent out, why not give it a shot? Professional photographers are always on the hunt for a scenic view or specialty event for a reasonable price. Plus showing these picture perfect features in your property’s listings are sure to be seen.
When it comes to being a landlord, there are numerous ways you can make more money. The possibilities are seemingly endless! If you own a multifamily building, you might want to install coin-operated laundry, vending machines, or coin operated games to occupy your tenants time while they are keeping busy, paying to do their laundry. It’s best to take a step back and consider what else you can offer your tenants while making money from your rental properties.
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