Apr 04 2017
20 Ways to Make More Money from Your Rental
Are you struggling to pay the mortgage with the money you receive from your rental property? Are you fed up with all the expenses that leave you nothing at the end of the month? Despite what most people think, making money from your rental property is not easy, especially if you have a mortgage.
If you are ready to give up and sell your property, try some of our suggestions before you do.
Like with personal finances, you should examine both your expenses and your income. Most landlords think the easiest way to get more money is to increase the rent. This is the most obvious way but not always the correct course of action. If you increase your rent above what the market will bear, you will have vacancies, higher turnover and bad tenants.
What can you do if you have maximized your rent but you are still struggling?
- Can you rent your property by the room? Some landlords create separate leases for each roommate and rent the property by the room.
- Check out Airbnb. Short-term rentals may be just the thing for you.
- Offer a furnished home for short-term rentals. You should be asking at least two times your standard rental rates to offset vacancies, utilities, cleaning, etc.
- Operate a rooming house, assisted living or halfway house etc – if legal.
- Increase late fees and any other fees that come from tenants not following your rules.
- You can charge very reasonable monthly pet fees, most tenants with pets will be happy to pay that.
- Offer additional services to the tenant: landscaping, house cleaning, pool cleaning. Contract them out and collect fees from those services. Some tenants will gladly pay more for the convenience.
- Update your property – this includes appliances, paint colors, floors. This is the best way to maximize your rent, but many landlords ignore it.
- Many expensive repairs can be eliminated by regular maintenance. Every six months, deliver new filters to the tenants; clean the drain, the dryer vent etc.; have a web page with instructions and videos about how to fix minor issues, such as resetting the disposal.
- Minimize vacancies and turnover time. Use professionals who can turn over the unit in a day. Start showing a month before the old tenant moves out. Offer free cleaning while showing the unit. It’s worth it. Price it well!
- Choose the right tenant. I can’t emphasize this enough. Tenants who can barely afford the rent can make your life miserable and be very demanding and expensive.
- Transfer some the cost of pest control to the tenants. Give them a pest-free house. After that, they will have one week to report any problems. After that it will be their responsibility to keep it pest free. You should fix any infestations, but you have to charge them for it.
- Conduct regular inspections. It’s best to combine the inspection with preventative maintenance. This way your tenants will be happy that your handyman showed up. If something is broken, it can be fixed, and you can charge the tenant immediately instead of at the end of the lease when the deposit may not cover it.
- Require the tenants to give you a professionally clean house and carpet. You can refer them to professionals you use. Conduct the final inspection after that has been done. Include a charge in the lease if the cleaning has not been done.
- Accommodate tenants if they want to leave early, but charge fees-two months’ rent is reasonable.
- Offer to rent appliances, furniture or a security system.
- Offer to rent storage if you can place a storage unit on the property.
- Charge a fee to customize the home-possibly paint a room or a wall. Don’t ever let the tenants do it. Send your handyman.
- If you are using a property manager, are you paying competitive fees? If not, find alternatives.
- Finally, examine your taxes and insurance. Is your property assessed properly? Are you overpaying for insurance?
I hope this list gave you some good ideas. If you are already using any of these methods to increase your rental income, please share your experience with us. Also please post your ideas, we would love to hear them.