As a rental property owner, it is natural to seek maximum profits from your investment. Some landlords find it hard to make a decent profit after expenses. However, there are many ways to increase your rental income even in a struggling real estate market. In this article, we will outline several ways you can assess and maximize your earnings.
Whether your property is a single family unit, a condo or a multi-unit apartment, you need to ensure you have few to none vacancies. This requires getting aggressive on marketing your property any time a lease is about to expire. A few ways you can fill rentals fast include:
- Free online marketing tools- you can save a lot of money on newspaper ads by posting on free property rental sites and social media. Most sites allow you to post photos and also prequalify potential tenants before showing the house.
- Organize open house days- At least twice a week, schedule multiple prospects to view the house thirty minutes apart. That way, you can show the house to more potential tenants without spending too much of your time there.
- Use realtors on a commission basis- Realtors have access to a wider network of renters and may be able to fill in a vacancy immediately it arises. Even though you have to part with commissions, it is still better than losing income through empty rentals.
Keep up your Repairs
All tenants want to live in a well-kept house. By routinely assessing your property and repairing damaged fixtures and fittings, happy tenants are more likely to renew their leases.
While you may want to provide the most comfortable homes, you do not have to make extravagant repairs. A few ideas to help you save on repairs include:
- Cleaning- Carpets that have been cleaned by a professional look good as new. Some walls can also be cleaned to save on painting.
- Repair before replacing: before buying new fixtures, find out if you can have them repaired with replacement parts.
- Repair regularly: Do not wait for your house fall apart before trying to fix it. Smaller repairs here and there are more manageable than costly emergency overhauls.
Multiple Income Streams
There are several easy add-ons and fees you can charge your tenants to make extra income. These include:
- A coin-operated laundry: If your apartments don’t have in-unit laundry facilities, your tenants would appreciate a coin-operated laundry in the building.
- Charge Pet fees: Most rentals now charge tenants with pets a nominal fee to increase revenue. In a multi-unit building, this can add up to a few hundred dollars a month.
- Wi-fi or Satellite TV: If you have multiple rental units, you can get special packages from internet and TV service providers. You could then charge your tenants extra for the convenience and make a tidy profit.
- Lease termination fees: Include a clause in the lease agreement where the tenant pays a termination fee if they break the lease.
- Vending machine: Apartment units with families or students could make you extra money if you put in snack vending machines in the lobby.
- Provide landscaping and cleaning services: contract a landscaping or cleaning company and charge your single family home tenants an extra maintenance fee to turn a profit.
- Collect application fees: when screening potential tenants, you may incur costs on background checks. Charging an application fee helps shift this expense and also eliminates jokers.
- Charge extra occupant fees: when a tenant signs a lease and brings in additional individuals to permanently reside in the house, charge extra occupant fees.
- Collect late fees: If a tenant pays their rent late, do not feel guilty about enforcing late fees if it is in the lease agreement. It will deter tenants from paying late and keep your rental income stream flowing smoothly.
Hire a property management company
If you are also working full-time, it can be difficult to keep up with all the responsibilities of managing your rental property. In this case, professional property managers in Utah can help with rent collection, house letting, repairs, and maintenance. All these processes can be conveniently automated by a trusted property management franchise allowing you to concentrate on other businesses.
Maximize your tax deductions
A lot of expenses you incur as a rental property owner are tax deductible. These include repair and maintenance costs, utilities, mortgage interest, insurance premiums, property management fees, legal and other professional fees, among others.
Always ensure your paperwork for these payments is in order so you can enjoy tax breaks and maximize your rental income.
It may be wise to hire a tax professional to help file your returns.
Increase rent strategically
Property managers in Utah agree that even in a competitive market, annual rent increases of 1-3% are feasible. Some ideas for increasing rent without losing tenants include:
- Upgrading amenities: most tenants don’t mind paying more for quality improvements to their units. A fresh coat of paint, some landscaping, a remodeled kitchen or bathroom and other upgrades can translate to a significant increase in rental income.
- Communicate changes in fees: being transparent with your tenants makes them co-operative. Inform them of changes to utility fees or any other charges before lease renewals are due.
Offer furnished units
Many tenants, especially those looking to lease short term require furnished houses. In a competitive rental market, offering furnished units could help get more tenants. Additionally, the units fetch much higher rent than unfurnished units. You are bound to recover your initial furniture investment and maximize your rental income long term.
Finding new tenants is expensive. Keeping your tenants happy ensures you aren’t constantly advertising, interviewing potential tenants, signing leases and repairing the house. Beyond the rent you charge, tenants like to live in homes that are well managed, and where they are well treated. Good customer service goes a long way.
To sum it up, you can increase your income by increasing rent, avoiding vacancies and reducing turnover. You can also look up a rental management company in your area to assist with property management. Finally, you can increase rental income by charging additional fees and providing extra amenities.