- 7 Simple Tips for How to Get the Most Rent for Your House
7 Simple Tips for How to Get the Most Rent for Your House
Every landlord strives to make more money from their rental property each month, but figuring out ways to do so seems to elude so many landlords.
There are a few ways to increase rental income without raising the rent and there are just as many ways to get more rent money for your home each month. If you implement every idea, you could be looking at thousands more dollars each year.
But in this article we’ll take a look at seven simple ways to get more rent money for your home on a consistent monthly basis.
1. Raise the Rent
The first, and easiest, way to get more rent money sounds simple, but there’s an art associated with it. You just need to raise the rent.
Raising the rent on tenants can be tough, as nobody actually wants to pay more next month than they were paying last month. This can only be done after a lease has expired, so be aware of that.
Raising the rent by 3 to 5 percent isn’t uncommon, and that’s about the maximum you’ll be able to get from a tenant upon renewal. If they stay in your rental property for three or four years, you may be able to successfully raise the rent twice without them searching for a new place to live.
If your current tenant decides they’re moving out after the lease is up, that means you’ll have to spend some money on tenant turnover, but it also means you can get 10 to 20 percent more for your property. Just make sure you check rental prices in the area because you don’t want to price yourself out and leave the unit sitting vacant for an extended period.
2. Exclude Utilities
If you rent out houses, you should never ever include utilities in the monthly rental cost. You may be able to guesstimate how much the utilities will cost on average each month, but tenants tend to use things more loosely when they’re not paying and more sparingly when they are.
By excluding utilities, you won’t be on the hook for a tenant who keeps the home at 72 degrees all day, every day — even when they’re not home. Nor will you be on the hook when they leave the faucet dripping, leave the outdoor hose running or decide to take an hour-long shower.
Excluding utilities takes out the guesswork and keeps the tenants responsible for the fair share of electricity and water they actually use — not what you budgeted for them to use.
3. Allow Pets
Allowing pets can have an adverse effect on your property, but that’s why you collect a pet deposit that’s equal to one month’s rent. Many landlords try to stay away from allowing pets to live in their rental unit, but the proper pets provide paydays.
You can charge a tenant an extra $30 per month for each pet they bring into your home. That’s $30 a month on top of rent or an extra $360 per year to put in your own pocket.
4. Charge Extra for Add-Ons
Add-ons are a tricky part of the landlord business, but they can work wonders if you get them to work. Add-ons include lawnmowing services, additional parking or storage and, the oddly difficult but lucrative, cleaning services.
For landlords renting out a house, charging tenants for lawnmowing services is the easiest of the bunch. Make sure the lease states tenants are responsible for lawn upkeep, and then you can hire a service to take care of it when they decide they don’t want to buy a lawnmower.
Charge them an extra $15 on top of the fees to find and maintain the contract with the mowers.
Additional parking and storage work similarly. If you have more parking spaces outside your home (mostly in areas where parking is scarce), you can charge the tenants at least $25 per month, per parking space. If they don’t agree, they surely will after they get their first parking ticket.
5. Rent the Unit by Room
If you want an opportunity to make better cash for the same property, consider renting the unit out room by room. If you opt into a traveling nurse network or have a property in a college town, renting room by room is much easier.
Let’s say you have a three-bedroom home that rents for $1,500 per month. Renting room by room allows you to charge upwards of $600 or $700 per month for a single room because renters who rent by the room typically don’t want to pay the full price for a one-bedroom or studio unit.
If you meet in the middle and get $650 per room, you’ve just increased your monthly rental income by $450 (or $5,400 per year!).
6. Furnish the Unit
Some people want a furnished unit and some people just don’t. That’s one reason why furnishing your unit is kind of a crapshoot, but it can work in your favor if the stars align.
For that same $1,500 unit, you would likely be able to charge $1,700 to $1,800 per month for the convenience of a furnished unit. Of course you’d be running the risk of tenants tearing it up and having to replace it. We recommend buying gently used furniture for a fraction of the price of brand new.
7. List It on Home-Sharing Websites
If you want to start raking in the big bucks, listing your home on a home-sharing website like Airbnb or VRBO can help take your rental income to the next level.
The same $1,500 unit can be rented for $80 to $100 per night or more in the right location. If you got $100 per night, you’d only have to rent it for half the month to receive the same amount you would have with a long-term lease.
If you have it booked solid, you could double your rental income with the click of a button. Of course, renting it through home-sharing websites also means you’ll have to clean it, or have a cleaning crew step in, after each person has completed their stay, which is money out of your pocket.