Maximize Rental Property Income


There are a number of ways to increase rental property income, but some of them are only short-term solutions. Don't be too tempted by plans that put more cash in your pocket for a few months but hurt your revenue in the long run. The following suggestions are about that "long run" and how to maximize what you get out of your real estate investments.

Raising Rent

Most of the time you will make more money when you raise the rent on your apartments or other rental properties. When won't you? When you raise them too far beyond the going rates for the area and the type of units you have. Do that and you might get more from your tenants for a few months, but they will be looking for other options, and you might lose a lot of income from vacancies. So if you find after some research that you are charging less than others, raise those rents, but not above the current market rates.

Lowering Rent

Flickr photo by Janine and Jim Eden

Lowering rent can be an option if you are already facing occupancies and you might be charging too much. Also, lowering or just freezing the rent at the current level for years can be a good way to keep really good tenants. Many landlords would prefer to charge $50 less per month and have great tenants who stick around for many years. It saves on the costs of lost income from vacancies and the expenses that come with preparing the apartment for the next tenants, and it also means less time spent managing your rentals.

Improve and Raise Rents

When you do have vacancies it can be a good time to make improvements to a unit which justify charging more rent. New carpet and paint are possibilities, but if you can add to functionality with things like a second bathroom, a new closet, a storage shed, or a carport, those minds of improvements will be worth more. $4,000 carefully spent and financed can result in $75 more per month in rent, which easily makes the payments for the money spent and gives you more net income.

Other Income Sources

To make more income from existing tenants without raising rents, you have a few options. You can install coin-operated laundry machines if you have an apartment building. If you own a four-plex you might buy several cheap sheds for the yard and rent them out to tenants who are getting crowded by their stuff. If you have tenants you think you can trust, you can offer to allow a month-late rental payment once per year for a $50 fee.

Reduce Vacancies

You not only lose the income from empty units, but you also have the expense of preparing them for the next tenant, and the costs of utilities. One of the best ways to increase rental property income then, is to keep those units full as much of the time as possible. Some landlords have found that of all factors that might be used to predict how long a prospective tenant will stay in a rental, the most predictive is how long they stayed in their last rented home. If in the interview or on the application you see good jobs and six years in the last residence, you might have a great new tenant, especially if you find out that they paid their rent on time for all of those previous six years.

Apply one or two of the suggestions here and you can boost your rental property income substantially.

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Every Way to Make Money | Maximize Rental Property Income