- 7 Tips to Increase Rental Income Without Raising Your Tenant’s Rent
7 Tips to Increase Rental Income Without Raising Your Tenant’s Rent
As a landlord, it seems like things are constantly breaking and in need of repair, or something else always seems to happen each month to make your profits nearly vanish.
While raising your tentant’s rent is the easiest way to get more rental income for your property, it can sometimes have a negative impact on your bottom line. But there are some easy things to implement in order to keep your tenants happy and put a little extra money in your pocket each month.
Instead of raising rent and risking losing tenants, pricing yourself out of the neighborhood or, even worse, letting your rental sit empty for months because nobody’s willing to pay the premium you’re asking for, implement these seven tips to increase your rental income without increasing rent.
1. Allow Pets to Move in
For some landlords, allowing pets to move into their pristine property may sound like more of a headache than it’s worth. After all, they tend to tear things up and leave the rental unit in worse condition than they found it — at no fault of their own conscience.
But allowing pets to move into your rental unit also allows you to charge a monthly pet fee, which can be anywhere from $20 to $60. On the higher end, that could net you $720 more per year — without having to do a single thing.
However, if you do allow pets to move in, we highly suggest making the pet owner pay a refundable pet deposit that equates to a single monthly rent payment.
This excess of capital will essentially double the security deposit to ensure there’s more money left over in case the tenant moves out and there’s more damage than you thought.
Allowing pets to move in is a win-win because many tenants with pets tend to stay in the same rental unit for much longer, due to the high pet deposits and less number of rentals accepting them.
So maybe a non-pet-owning tenant would’ve stayed in your unit for one year while the pet owner stays for four. That saves you money on turnover costs, advertising fees and keeps even more money in your pocket.
2. Set Strict Late Fees
Setting strict late fees (for a lump sum three or five days after it’s due and extra accrual each day thereafter) will let the tenants know you’re not playing around and put extra money in your pocket if they’re late on rent.
While we all hope tenants pay their rent in full when it’s due, holding firm on late fees will increase your rental income without having to increase the monthly rent.
3. Offer Upgrades
Offering upgrades is a great way to make a little extra money and keep your rental unit tidy. If you have a house with a lawn, offer to hire a lawn service to cut the grass so the tenants won’t have to do it themselves.
You can charge them $10 or $15 extra per month for finding and maintaining the relationship with the mowers of your choice, earning you up to $180 extra each year.
Another upgrade to offer is maid service. While this may be a tougher sell, it almost guarantees they’ll get their security deposit back (if they’re just messy and not destructive) and keeps your place tidy. Again, you can charge an extra $10 or $15 per month for finding and maintaining the relationship with the maid service.
4. Charge for Extra Parking or Storage
If your rental unit is in a high-traffic area with few places to park or you own a unit (or the entire building) of a condo or apartment, parking is a commodity, and the tenants can be charged for this commodity.
It’s kind of like a convenience fee, which is why ordering pizza for delivery is more expensive than ordering pizza for carryout. Charging the tenant up to $20 per month per parking space can net you $240 per year for a single space or $480 per year for two spaces!
5. Add a Vending Machine
While vending machines can really only be added to condo or apartment units (it would just be weird to put a vending machine in the backyard of your rental house), they generate substantial income.
Think about it. Buying candy, snacks, sodas, sports and energy drinks in bulk and charging 50 percent more in the vending machine than what you purchased them for really adds up.
If you have a decently sized apartment complex and sold 100 items for $1.25 each, paying just $0.50 per item when you bought them, that would be an extra $75 per month or $900 per year!
6. Utilize Laundry Machine Techniques
Coin-operated laundry machines can make landlords of apartment or condo complexes some serious cash. Each load of laundry costs $1.25 to wash and $1.25 to dry, putting the total cost at $2.50 per laundry load.
Let’s say you own a four-unit building that isn’t equipped with machines inside the units. The average person will do about eight to 10 loads of laundry each month. At the high end, that’s $25 per month per unit or $100 per month for the entire complex. That’s an extra $1,200 in your pocket each year!
Don’t own a multi-unit building? Don’t worry, there’s another way to utilize laundry machine techniques in your rental. By installing washer and dryer hookups and providing a washer-dryer combo for a low monthly payment of $15 to $25 per month means you’ll be making an extra $180 to $300 per year.
Most tenants will balk at the idea of purchasing their own laundry unit for a rental, so this technique usually works for a small monthly fee.
7. Use Home-Sharing Platform When Unit Is Vacant
One of the worst things a landlord can face is an empty rental unit. There’s really not much worse than having your property sit vacant between renters and having to shell out the monthly mortgage payment from your own savings account.
Thanks to home-sharing platforms like Airbnb, VRBO and even Booking.com, now you can rent your unit out short-term between tenants. The best part is you’ll be able to rent it for even more money per night than if a tenant had signed a lease!
Tools of the Trade
While some of these tips can only be utilized on certain rental properties and when the home is vacant, implementing as many of these techniques as possible can easily net you a few hundred — or even a few thousand — dollars each year without having to raise the rent!
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The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.