Whether you’re hoping to own a rental property or looking for ways to earn more from it, you will find these six creative approaches on making more money from your rental real estate useful:
Decrease Vacancy
The easiest way to reduce vacancies is to find a long-term tenant and avoid dealing with turnover. In case the tenant needs to move, vacancies can also be reduced by keeping turnaround time to a minimum.
You might wonder how this can be realistic in an area with lower rental property demand. The truth is that almost every property in every neighbourhood has a strong demand at a price. If your vacancies are regularly high, you may be doing yourself a disfavour and need to rethink your price point.
Increase Rent Strategically
Now that you understand that lower rents will lead to higher incomes, you are advised to raise rents for long-term tenants. This really isn’t at all a paradox. Instead, it is a sensitive balance which requires knowledge of the value of your property in relation to your competition.
As I said, if tenants can’t find lower rents elsewhere, they could be more loyal. But that does not mean that if you don’t have good reason to do so, you should never raise rents. Moving is expensive for tenants too. You still have the upper hand if the value of your current rent is slightly higher than the value of a new rent plus moving costs for a tenant.
Be Firm on Late Fees
Late fees are included in leases for one reason. Most landlords overlook some vital things when relating to their tenants, such as waiving late fees and not taking the time to collect them when the tenant is a day or two behind schedule. You may be losing money by doing so, however. Be firm on late fees or, if possible, use an online rental property management software to include late charges automatically in the rental collection system.
Rent Out Additional Space
If there’s ample space on your property, such as a reserved parking space or garage, offer the tenant the opportunity to rent the space for an extra monthly fee.
If there’s still ample space on your property, such as a reserved parking area or garage, you can offer the tenants an opportunity to rent the space for extra monthly rent. Even if you are not a multi-family or residential home, you can take advantage of the extra income by renting out parking space for big events near your house.
Depending on the location of your house, the size of the space and the demand for extra parking space in that area, you can get an additional £10-£250 or more a month for renting out additional space on your property.
Add Revenue Streams
If you have a multi-family structured house, you could explore the opportunity to make extra money by providing services like vending machines and a coin-operated laundry. Besides giving you extra revenue, these will add resale value to your property.
For a single single-family property, you could offer extra home improvement services like house cleaning and landscaping, after signing the initial rental agreement. For a little extra fee, a tenant may be happy to avoid responsibilities he/she would otherwise have to take on.
Whether you choose to manage your property yourself or hire an agent, ultimately, you may find that you can achieve your business objectives not only through the acquisition of large properties but also through the smarter handling of a smaller number of properties.