It's a common question that all landlords ask themselves—how can you increase your profits without raising rent and driving away tenants. Your tenants are the source of your income and it is important to keep them happy. This can be a difficult line to toe
if you're a beginner landlord.
While raising rent may seem like a simple thing to do, it’s not always ideal. This is especially true during the ongoing global pandemic, as landlords across the country are finding themselves under greater scrutinization as debates about evictions and rent increased have become prominent.
Some of the potential risks of raising rent include:
- Risk of losing a good tenant. By raising rent to make a little extra money, you risk losing a good tenant who pays rent on time, takes care of your property, and plans to stay long-term.
- It could be illegal. Some states have laws in regards to rent limits. If you exceed the permitted amount, you may find yourself breaking the law and facing time-consuming and costly legal troubles.
- Higher rent may increase likelihood of late payments. Increasing rent may negatively impact your tenant’s monthly cash flow. Consequently, this may lead to late payments.
- Your rental unit could become unattractive. Overcharging tenants could make your rental unappealing, which can lead to longer vacancy periods.
Luckily for you, there are plenty of ways to make more money other than raising rent. Lets take a look at some of the options that savvy landlords frequently turn to.
How to Raise Your Rental Income
Allow Pets and Charge a Fee
America is a nation of pet lovers. As a matter of fact, two in every three people own a pet, according to some studies.
It’s understandable why some landlords are usually against allowing pets in the units they own. After all, pets are known to cause damage and disturbances. On the other hand,
allowing pets has numerous advantages.
For one, you are able to appeal to a larger pool of prospective tenants. Two, you may be able to improve your tenant retention rate. And even more importantly, you may be able to ask for pet rent to mitigate the risk.
Some tenants will happily pay a little extra fee in exchange for being allowed to keep their furry friend. The fee can be a monthly pet rent or a one-time pet fee.
Add a Vending Machine
You can increase your income simply by adding a vending machine. This has as the potential to generate thousands of dollars in extra income every month, especially in a multi-unit complex.
A vending machine brings with it convenience that your tenants will appreciate. A vending machine with toiletries, Chapstick, detergent, and food can be a huge time-saver for your tenants.
AirBnb Your Rental During Vacancies
Struggling to fill a vacancy? If so, consider turning it into an
Airbnb. In fact, you may be able to make more with it than you would even with a long-term renter.
A unit renting at $1300 a month could net you around $150 a night as a vacation rental. At that rate, it’d take little more than a week to recoup the lost rental income.
Furnish Your Rental
It goes without saying that you can earn more income with a furnished rental than an unfurnished one. If you provide a
furnished rental with great amenities, you'll often attract tenants such as students, professional and expatriates.
Besides asking for more rent, a furnished apartment may also enable you reduce your tax bill. That’s because furniture for a rental property is a depreciable asset and is tax deductible.
On the other hand, providing a furnished apartment has its fair share of cons. For one, there is more risk of property damage. And two, furnished apartments don’t give tenants room for customization or personal touches.
Offer Rental Upgrades
You can also make life a bit easier for your tenants by making some important upgrades. Consider lawn care, laundry, or dry cleaning. A good tenant often will not mind paying extra for upgrades that make their life easier.
Lease a Billboard
Do you have a larger building that’s conveniently located on a busy street? If so, leasing a billboard can turn out to be quite lucrative. If you live in a high-traffic area, you could net hundreds of dollars a month simply for displaying an advertisement on your property.
Offer Storage Space
It's common for tenants not to have enough storage space to store their excess furniture or their winter wardrobes.
Depending the size, a storage shed can net you anywhere between $35 and $200 a month in extra income.
Do you have an uncovered parking spot? It's reasonable to charge a monthly parking amount, the amount of which will depend on your area. In downtown areas, parking is always at a premium.
Add Solar Panels
Installing
solar panels on your property is a great way to make extra income, and you can feel good about taking a positive step that benefits the environment.
Did you know that you can function as a utility company by adding solar panels to your rental property? That’s right. If your local power grid allows for two way transfers, you can sell energy back to the city.
Besides selling excess energy to utility companies, you’ll also be able to mint extra coin in other ways as well. For example, you could charge an electricity bill to your tenants for using the solar energy.
Let Your Tenants Sublet
Whether or not to allow tenants to sublet is usually a topic of debate among landlords. And the majority of landlords choose not to. After all, among other things, the subtenant may not be as reliable.
With that in mind, subletting isn’t always a negative if you make sure to enforce rules that protect you.
For instance, require that those who wish to sublet undergo a mandatory screening process. To earn some extra income, you may also want to charge a fee for any tenant wishing to sublet their unit.
The Bottom Line
Now you have access to nine ways to increase your income without raising rent. At the end of the day, as a landlord, you are in the rental business to maximize your earnings. It's always nice when you're able to generate more profit while also providing useful services to your tenants.
Looking for help with making the most of your rental property? The team at
Dawson Property Management has years of experience maximizing the profitability of property owners in the Charlotte area. Get in touch today to learn more about the services we can provide.
