Aside from having vexing tenants, a landlord’s second-most stressing issue is often how to maximize income from their rental property.
As a rental property owner, there’s only so much you can do to make an extra dollar. But, it’s possible to get the most out of your properties if you follow a few smart tips. All it takes is a little creativity and a mutually beneficial relationship with your renters.
So, what can you do to make more money from your real estate investment?
How to Add Value to Your Rental Property
1. Work on Reducing Vacancies
Prolonged vacancies are the number one reason why most property investments underperform.
It doesn’t matter how beautiful the rental property is or how high the rent is. If there’s a vacancy, then it’s safe to say you aren’t getting the most out of your property. Getting a good tenant is never easy, but it’s also not impossible.
To combat vacancies in your rentals you can:
- Try advertising your property as soon as a tenant informs you of their plan to move out;
- Reduce your rent to somewhere between 95 – 97% of the normal neighborhood range. This helps to attract more potential tenants giving you a wider range of options. It makes it easier for you to find a good and long-term tenant.
- Avoid fitting your rentals with furniture. Yes, furnishing your rentals may be a quicker way to end vacancies. But, it also means that you’ll have to worry about finding new tenants more frequently. This is because furnished rentals often attract short-term renters
2. Make Every Inch Count
Are you renting out every part of your property? If not, you may be missing out on a number of income-generating streams. For example, if your rental has an empty basement, attic, garage, cellar, or extra office space, that’s great.
You can transform the space into a storage unit. A lot of people need extra storage especially those that are very attached to their stuff.
The biggest benefit about turning unused space into a storage unit is that it’s very convenient. How? Well, unlike residential units, a storage space doesn’t have too many needs, regulations, and headaches. They can be rented out to your tenants or even an outsider. And, if the tenant fails to honor their rental obligations, it’s easier to recover what you’re owed quickly by auctioning the items in the storage space.
3. Take Advantage of Annual Events and Festivals
What if you could profit off major events around your city? For example, Summerfest is one of America’s biggest festivals attracting up to 900,000 fans for 11 consecutive days each year. Obviously, there’s no city that’s can comfortably accommodate such a massive influx of visitors.
During such an event, there’ll be thousands of people in need of shelter, parking spaces, restrooms and so much more. Now, if your rental has around 10 free parking spaces, you can rent them out at say $5 an hour; given that the demand is high. This means that you’ll be making $50 an hour, $1,200 a day, and $13,200 for the 11-day festival. Amazing, right?
That’s just a hypothetical – yet reasonable – example of how you can profit off events happening around your rental property. And while some of them may be short or less-rewarding you’ll still have earned an extra dollar.
4. Cut Your Rentals’ Operating Costs
Among the many things that people look for in rental properties are reliable and continuous utilities like electricity. Now, if you can manage to supply this utility to your tenants then you’ll be able to increase your income. But, how can you achieve this? Well, you can opt for solar energy to power your rentals.
Despite installation costs being high, solar systems are the best low-cost power option for you and your renters. Thanks to advancements in the industry, switching to solar energy has become a lucrative move for any landlord.
For instance, there’s a Tesla’s Powerwall battery that relies on solar energy; it can power a home for over 7 straight days without being recharged.
This means that whether the power grid is down or it gets cloudy for a while, your renters will still have access to electricity. It not only builds loyalty among your renters but also gives you a solid reason to include energy fees in the rent.
5. Partner with Local Service Providers
At some point, your tenants will be in need of a service. It could be a cleaning, plumbing, housekeeping, painting, electrical repair, landscaping, or even a moving service.
Partnering with companies that offer these services is a sure way of earning money through referrals and commissions. This is also a great way to know whether or not your tenants are taking care of your property.
These are just some of the many creative ideas you can use to make more money and add more value to your rental properties. Sometimes, the tenants may not agree with these ideas, and that’s why it’s always wise to loop them in early.