One of the main reasons people get into rental property management is to increase profits with a minimum amount of work. Collecting rent, finding tenants, and addressing tenants’ concerns may not sound like tough work. But if you’re not careful, expenses can creep up on you and revenue can dip.
To maximize your rental property earnings as a property owner or property manager, follow these 7 tips.
Handle Maintenance Yourself
No matter what type of property you have, someone will have to perform basic maintenance tasks. If you’re handy, it’s best to handle them yourself. This will save you money from having to hire contractors (which can cost over $100/hour) to do small projects.
Hire contractors for big jobs and dangerous jobs, such as electricity and plumbing issues. For small tasks, try to do the work yourself to save some money.
If you don’t know the difference between a hammer and a screwdriver, consider hiring a local handyman. With freelancing services such as TaskRabbit, you can find skilled men and women to perform all sorts of tasks around the house.
Freelancers can be much cheaper compared contracting companies. Always make sure they are probably vetted.
Take Advantage of Tax Savings
As a landlord, you’re allowed to deduct many costs at tax time.
To reduce your taxable income, make sure you take advantage of every possible deduction. Maintenance costs, advertising costs, insurance premiums, and management fees are just a few.
Make sure not to overlook things like operating expenses and commissions you pay for tenant referrals.
Minimize Vacancies
An empty unit means one thing—lost revenue. As a property owner or manager, you’ll need to be diligent when it comes to turning over units, finding new tenants, and keeping your units leased.
List your properties on rental websites and post Craigslist ads before your current tenant vacates. Let your current tenant know you may need to show the property before they move out.
To maximize your earnings, try to minimize any gaps in tenants. If you can, try to move one tenant out and the next one in within a week or two, allowing time only to paint, clean, and make any repairs to prepare for the new renter.
If you’re having a hard time finding a tenant, you may want to consider move-in incentives, like a discount on the first month’s rent or a cool tech gadget like a Google Home. .
It’s also important to know what your competitors are charging for similar rental properties. If you can undercut your competitors a bit, you’ll have a better chance of bringing in consistent profits. We’ll talk more about pricing in a bit.
Install Coin-Operated Laundry Machines
Do you own a multi-family unit or a large apartment complex? Consider putting in coin-operated laundry machines. By having washers and dryers on the premises, you’ll make life a whole lot easier for your tenants. And in time, these machines can also become an added source of income.
You can use the money that your tenants pay for each load of laundry to pay for the appliances themselves. Over time, that money can be used to cover ongoing maintenance issues.
Depending on how many machines and maintenance costs, it could could create a valuable revenue stream.
Keep in mind, if you plan to charge tenants for laundry, you’ll need to handle the maintenance on the machines. Whether you do it yourself or hire someone, be ready to add the extra task to your plate.
Charge a Pet Fee
Many landlords don’t allow tenants to keep pets—and for good reason. If you decide to allow pets on site, make sure you charge a pet deposit and/or a monthly pet fee. Pets make stains, so collect those pet fees to cover the costs of any maintenance that might be needed when your tenant moves out.
Keep the fee to a reasonable rate, something in the vicinity of $50 a month. Most tenants won’t have a problem with a small fee, but if your pet fee is hefty, it might be hard to find pet-loving tenants who are willing to pay a lot more.
Put In Vending Machines
Like coin-operated laundry facilities, vending machines are another way to earn some extra income. Soda machines and candy machines are ideal for multi-unit properties.
Place them next to your dryers to make laundry time a bit more enjoyable. If there’s no space in your laundry room, put them in a common area where tenants pass by every day.
If you want to save money and earn extra cash, buy snacks and soda cans in bulk. By stocking the machines yourself, you’ll never have to pay a service fee.
Know What Your Rental is Worth
We’ve already discussed how lowering your rent can reduce vacancies, but keep in mind that this can work against you. In competitive markets, it’s crucial to know what your rental property is worth.
In high-demand areas, such as San Francisco, do thorough research so you always know what other landlords are charging. And if you have lots of tenants interested in your properties, don’t be afraid to charge a little more.
Before you set your rental price or raise your rent, look at tools like Zillow and other apartment sites to research other properties in your area.
The Keys to Success
As a rental property owner or property manager, you have to know how to save money where you can.
If you’re handy, do routine maintenance yourself. When tax time rolls around, make sure you take advantage of every possible tax deduction. Charge pet fees when applicable. And, if you can, install coin-operated laundry machines and vending machines as an extra source of income.
But the most important thing is to keep your units full. Make sure you know what competitive units and complexes are charging and price your units accordingly.
Is your area is in high demand? Consider raising your rent. Are you having a hard time finding a tenant? Think about lowering your monthly rental fees a bit. No matter how many units you have, keeping a steady stream of tenants is the key to making money with rental properties.
Don’t forget about parking. Garage, carports and open spaces can bring in a huge amount of income for a complex.