It doesn’t matter whether you’ve been a landlord for two years or two decades, the goal is always the same, which is to reap maximum returns from your investments. You’re constantly striving to grow your earnings without incurring too much in expenses. And the easiest way to do this is to increase the amounts you charge in rent.
In reality, however, raising rent isn’t always the best answer. Continual rent increases not only risk driving tenants away, but they also raise the likelihood of late payments. A more experienced property manager might advise the exploration of other more sustainable revenue-enhancers. The good news is that you have quite a few options here, read on to find out which ones will suit you best.
Create Storage Space Options
A creative way to maximize your leasable square footage is by using any extra available space on the property to build storage areas. Many tenants would gladly pay extra rental costs, and appreciate the extra space and convenience because it is something that off-site storage companies cannot offer.
Rent Out Extra Parking Spaces
If you have extra parking spaces, some of those spaces could be offered to tenants as an extra or reserved parking spot for an additional fee.
Buying Bulk Services
There are other way you can save on costs to improve your profits.
If you have several properties in your portfolio, you can often negotiate special pricing for services on all your properties. You can also provide your renters with a list of “preferred” service providers, where they can also take advantage of extra savings or special offers by local companies. (cleaning, dog walking, dry cleaning, babysitting etc.)
With the right approach, these convenience services will help you earn points with renters while cutting costs.
Supply The Furniture
Furnished units can often fetch higher rents. Furniture will absorb wear and tear over time, but the extra rent can often outweigh the costs of repair or replacement. Remember, you don’t always have to invest in brand-new furniture. Many great pieces can be found at yard sales or discount stores at a fraction of the cost of new.
Conventional wisdom dictates that you avoid renting short-term if you want to make good returns in the long run. But that doesn’t mean you cannot make money with short-term leases. In some areas, it can make sense to turn vacant units into vacation rentals.
As unpopular as they may be with renters, fees exist for a good reason. They’re meant to recoup some of the costs you incur in the course of doing business. And in other cases, fees offer a middle ground of sorts between your renters’ needs and your own policies.
Here are some of the charges you should impose:
- Application fees: Screening prospective tenants is pricey. Not only do you incur the cost of running background checks, but you’re also spending your own time in the process. You should therefore charge an application fee that reflects all costs, including these two.
- Holding fees: In times of high demand, a prospect might be inclined to put money down to lock in a unit if they pass a background check. But this needn’t be part of the security deposit. Call it a fee, and it becomes a sunk cost — you’d only refund if the applicant fails the check.
- Extra occupant fees: As a landlord, you have the right to amend one’s tenancy when they bring another individual into their unit. More residents mean more wear and tear on your property, so it’s only proper to bump up the rent while you’re at it. Just make sure to be familiar with all applicable laws.
- Pet fees: Perhaps you’re leaving money on the table by having too strict a pet policy? Consider loosening up a bit to open up a new revenue stream. You could impose a non-refundable charge on anyone who wants to bring in a pet, or a little more each month in the form of pet rent. Note that neither can be charged if the tenant relies on the animal to cope with a disability.
- Late fees: You are fully within your rights to enforce late fees — they’re there for a good reason, like we said.
- Lease termination fees: You can save yourself, and your tenants, lots of headaches by specifying a penalty for premature termination in your leases. The fee will offset the turnaround expense, and mitigate loss resulting from vacancy.
Money saved is money earned. With diligent record-keeping, budgeting, and an eye for opportunities, you can avoid unnecessary expenses and grow your earnings while still charging reasonable rents on your properties.
Are you ready to capitalize on your options? If you are self-managing and having to juggle multiple responsibilities as a result, that might not be practical.
So why not let a professional and experienced Dallas property manager shoulder the burden on your behalf? At Specialized Property Management in Dallas, Texas, we pride ourselves in helping property investors turn dreams into reality. We have enough resources to take care of everything, from marketing your properties and screening tenants, to rent collection and maintenance. Call us today for a quote and let us work out an arrangement to free your focus for the growth of your business.