Jan 08, 2020 - by Erik Carrier
Congratulations! You’ve purchased a rental property and you’re now on your way to creating a steady stream of passive income. At some point in the near future, however, you’ll be looking for opportunities to increase the income you receive from your investment property.
The following lists some easy and practical ways that today’s most successful rental property owners employ to increase their income and secure long term gains in their wealth from the assets.
The easiest way to increase the income you receive from rental properties is to raise the rent. Evaluate what similar units in your area are renting for, or simply ask other landlords in the neighborhood. Raising the rent even a few dollars in a multi-tenant building can result in several thousand dollars in additional income annually. If an increase can be justified, there’s no faster way to maximize the value of your investment.
Essential Property Updates/Upgrades
An income property is an asset - an asset that needs to be maintained. Being strategic about the property updates that you make can be a benefit to tenants and help justify the rental increases in case there is pushback from tenants. There are many property upgrades that could be made, but one of the most meaningful (impactful) is to add new and better windows. Not only do they look great, but there can be significant savings when it comes to heating and cooling a unit - savings that you pass on directly to the tenant.
Rent increases are easier to explain to tenants if property owners feel they are receiving something in return. That may be to improve the landscaping, expand storage areas, add a laundry room, or a carport to cover designated parking spots. Each is a sought after amenity by tenants who will be more than willing to spend more to realize their benefit.
Improve Operating Efficiencies
Make no mistake about it - owning a rental property is a business. And with any well-run business, it is necessary to be as efficient as possible when it comes to the management of the asset and its operation.
Property owners that utilize systems to manage their tenant experience (e.g. rent collection) tend to be more successful in general, but there are many ways to improve operating efficiency. Outsourcing the management of an income or rental property to a qualified property management firm for example is the most effective strategy to improve operating efficiency. Otherwise, you’re spending your own valuable hours doing work that is likely better managed by someone with extensive experience and who has the relationships in place to realize improvements.
Are you a property owner looking to boost your rental property income? Request a consultation with the property management experts at RedStar Property Management and discover ways to enhance the tenant experience and increase the passive income stream from your rental property.