If you own a rental income property, it is your desire to get high returns on your investment. But there is always a limit to how much you can earn from a property depending upon its condition and location. Nevertheless, there are many ways in which you can strive to generate more revenue form a rental income property.
Prevent tenant turnover
Increasing the monthly rent is the first thing that comes to the mind of a landlord when he wants higher income from rental property. However, if the landlord finds a way to get high quality tenants that pay rent on time and stay for a long time in property, he can prevent frequent tenant turnover which is a big reason behind cash flow problems. Of course, tenants will keep moving out because of genuine reasons. But it is unacceptable to have tenants go and live in another property in your area. You need to find solutions to the problems your tenants face so as to keep them happy and satisfied.
When you lose a tenant, you lose not just monthly rent but also spend money on cleaning, repairs, and marketing of the property to attract a new tenant. If the tenant turnover is high, you incur this expenditure repeatedly, thereby decreasing your profit from the property. Listen to the grievances of your tenants and undertake repairs quickly. Try to solve their problems like a guardian to make them feel they are living in a property where there is a caring and compassionate landlord.
Make efforts to lower vacancy rates
One reason why monthly rental income is low is because many units remain unoccupied at any given point of time. Also, units remain vacant after a tenant moves out until a new tenant is ready to move in. One way to make a beeline of tenants in your property is to lower the first month’s rent by 5-10%. This way you will have a new tenant waiting to move in as soon as any one of the existing tenants moves out.
Charge fees for late payment
If you are collecting rent form your tenants yourself, you must be aware of the fact how some tenants delay the payment. If you are lenient, tenants extend date of payment knowing there is nothing you can do about it. Tenants will always have one or the other excuse for paying rent late. However, if you introduce a late fee, you will find that most of your tenants have started to pay their rent on time. Also, you earn money when they make a late payment.
Increase the rent
If you have maintained your property, you are within your right to raise the monthly rent after every year. Your tenants will not move out knowing well that there is no property in the area that can match the kind of amenities you provide. Even those applying for a tenancy know they are better off with you rather than living anywhere else.
However, resort to rent increase only when you have utilized all other methods as there is always this risk of losing a few of your tenants because f increased rent. Make sure that rent increase coincides with the time of lease renewal so that your tenants have the chance to opt in or move out.
Look for new income opportunities
There is a limit to how much you can earn through rent increase. If you have a low vacancy, low turnover, and late payments from your tenants, you must search for new ways of earning money. You can provide value added services to your tenants like laundry, vending machines, and cleaning service to add to their convenience and comfort.