The concept of investing and capitalizing on a rental property is fairly simple. You purchase a property with a low-interest mortgage, make necessary repairs, and rent it out for an asking price higher than your mortgage. You make money to pay off the mortgage quickly and/or make further investments to increase your revenue streams.
But there’s more opportunity for making money on rental properties than just collecting rent. In fact, there are dozens of ways that you could increase your regular income from your rental properties and make more money faster.
Here are some you should try.
- Set Late Fees
If you’re trying to be likeable, you might allow a small grace period for late rent. It shows respect and kindness to renters, leading to less turnover. But don’t be a pushover about it. Many apartment complexes are more relaxed on their late fees than they should be.
Collect late fees for any renters who fail to pay on time. They signed a contract, and they owe you the money. The late fee helps people pay rent on time, and it protects you if a renter defaults on their payments.
- Charge for Parking
When you’re in charge of an apartment complex, there are plenty of extra, in-demand things you can charge for, like parking spots. A lot of renters don’t own a car, so they’ll feel like they’re getting a deal if they don’t have to pay for a parking spot. Meanwhile, you’ll get to pocket a little extra for those that do.
If you don’t fill up your parking spaces all year long, you can also rent them out during events. One property manager made more than $7,000 during a 10-day strawberry festival in Florida by renting out his extra parking spaces.
- Install Solar Panels
A few years ago, solar panels were ugly and expensive. It was rare that you could get a higher return than what you put into it. However, things are much different now. Power grids are changing along with the structure and affordability of solar panels. The price of solar panel installation has fallen by more than 60 percent in the last decade!
Now, not only are these panels economical, but they’re also an attractive thing for renters. When you’ve installed solar panels, you can sell energy to your renters, who can then sell the extras to the grid. It’s a win-win for everyone, and in a place like Katy, where it’s sunny often, it’s an excellent investment for your multi-family rental property.
- Add Services of Convenience
The millennial generation are the most common renters, and they tend to prefer one-stop shops, even if it costs a little extra. You can turn your rental property into a profitable business with convenience services like babysitting, dog-walking, dry cleaning, concierge, coin-operated laundry, and more services.
If they’re affordable and convenient, renters are likely to pay for them. You’ll have an easier time filling your vacancies and padding your bank account at the same time.
- Charge Based on the Unit
If you own an apartment complex with different units, base your rent based on what’s inside. For example, if one unit has an excellent view, a balcony, and central air, you can charge more than one with fewer windows and a window air conditioning unit.
If you have a cookie-cutter style apartment complex, there are still ways you can capitalize on prime apartments. You could base the rent on the view, which floor it’s on, or how it’s furnished.
- Storage for an Additional Charge
If your complex has vacancies, an attic, a shed, or extra rooms, you can make a little extra by renting them out as storage units. Renters almost always need extra storage, and if it’s nearby, they’re happy to pay for it.
You might find that it’s even easier to rent out a vacant apartment for storage rather than to someone who will live there. You won’t have to worry about contract breaches or legal rights, and you can potentially make more on the storage space than you would on a renter.
- Charge for Property-Related Services
Your landscaping services don’t have to be included in the price of the rent. You can easily build some extra cash by charging for little things like snow removal, lawn mowing, and basic non-essential maintenance. Call it an HOA fee, and ensure that the property always looks great.
You could also offer other services like housekeeping or deep-cleaning services. This is a double-edged benefit for you; it brings in a little extra revenue while keeping your properties clean and well-maintained between renters.
- Increase Rent Strategically
Although a sudden rent hike will likely leave a bad taste in the mouth of your renters, there are strategic ways to increase rent. It starts with understanding your current market. Renters might leave in search of a cheaper apartment if you don’t raise your rent according to complementary units.
If you’re planning to raise the rent, make it worth the rent increase. If you’ve never repainted, repaired the leak under the sink, or replaced the carpets, your tenants won’t be happy with a sudden increase. However, small updates here and there can make a rent increase worthwhile to a tenant over time.
- Charge a Flat-Rate
Charging a flat rate means you include a general cost estimation of utilities, including water, gas, garbage, sewer, and electricity in the cost of the rent. A flat-rate rent payment can be an incredibly powerful tool in the hands of a savvy property manager. It’s an attractive rental option for the renter who wants to minimize their responsibility and maintain a steady rent deduction each month.
It can also be positive for you. Although some tenants may use more utilities than their rent payment covers, others will use far less. You can pocket the extra and put it back into your units.
- Hold Paid Classes
There really is no limit to the ways you can create revenue in your rental properties. One great idea is to hire a yoga, Zumba, or personal training instructor to hold classes on the lawn each morning for a fee.
You could also hold personal finance classes, self-reliance courses, or any number of useful gatherings. Your tenants will appreciate the convenience of these gatherings while growing closer as a community. You’ll reap the financial benefits and maintain tenant loyalty.
- Hire the Property Managers at Green Residential
Time and time again, we’ve seen how property managers can raise your property values and maintain high rent prices. At Green Residential, we’re ready and willing to help you manage your Katy rental properties.
We offer services that range from landscaping to tenant screening to rent collection, and we’ll get you the necessary help for your property. For more information about how Green Residential can raise the standard of living at your Katy complex and ensure a higher income for you, contact us today!