Landlords feel the financial pinch of running a rental property business when taxes and other expenses increase while they continue receiving a static rental income. It bites into their bottom line, making their endeavors less profitable. The guiding principle behind becoming a rental property owner is earning an income that exceeds the associated expenses. Many landlords find themselves barely breaking even, making them wonder if being in the rental business is worth it.
However, a few simple changes to your approach could increase how much money you make in your rental business. While some might require a capital outlay, others are inexpensive and easy to implement. Here are three ways to increase your rental property revenue:
Let the professionals in on the action
Most landlords agree that hiring a property management company is an ideal point of departure to maximizing their rental revenues. It might sound counterintuitive as these companies charge a percentage. However, the amount of time and money you save by having a professional manage the day-to-day responsibilities will increase how much money you make from your rental.
When it comes to rental property management Colorado Springs has several local companies that rental homeowners can opt to work with, including Evernest, Bijou Property Management, and Byrne Real Estate and Property Management. Evernest is known for its team of hardworking, dedicated professional property management agents. It offers various services to landlords, easing their burden and allowing them to pursue other endeavors. In addition to its office in Colorado Springs, Evernest also operates in Fort Collins, Boulder, and Denver. A landlord’s alternative is to work with one of America’s largest residential property management companies, such as Greystar or the Lincoln Property Company.
Property management companies work with a network of Colorado Springs contractors that perform maintenance and repairs, offering top-quality work at reasonable prices. This reduced expense means that landlords get some extra profit from their rentals.
Additionally, property managers ensure that landlords are charging market-related rental prices. Many landlords do not do sufficient research into setting their rental figure, often undercharging their tenants. Colorado Springs property management agents understand the local markets and prevailing trends and help landlords set realistic rental prices to maximize profits.
Any extras a landlord adds to their rental property allows them to charge higher rental prices. Therefore, investigate what potential renters want from their rental homes and set about providing these amenities. For example, including a washer, dryer, or dishwasher entitles you to charge an extra amount. Many renters do not own these appliances and would pay additional rent as they cannot afford to buy them.
Some renters need furnished homes, especially those moving due to personal circumstances, such as divorce. If they rent your home furnished, you can charge them extra rent for that option. Landlords will resist this idea, wondering what to do if the tenant does not need appliances or furniture. However, clever rental property owners have a storage unit to keep furniture and appliances to accommodate renters who need them. It becomes even more profitable when the landlord owns more than one property. When a tenant opts for a furnished rental home, the landlord can charge a higher security deposit to mitigate potential damages.
Another criterion that many renters have is being allowed to have pets. Few landlords want to entertain the notion that pets are messy and cause damage. However, this is not always the case. If you decide to go down this road, insist on a pet deposit to put aside for additional cleanup when the tenants vacate the property. Additionally, charge an extra fee per pet per month. Most animal owners would be more than prepared to pay that fee to keep their fur babies with them.
Additional contractual fees
As a landlord, include contractual clauses that allow you to charge extra money under specific circumstances. For example, set a lease termination fee to cover your rental income while you search for new tenants after the previous ones left before their lease expired. A sudden vacancy could leave you without a month or two of rental income, incurring out-of-pocket expenses with no incoming funds to cover them.
Consider an extra occupant fee. Therefore, if tenants allow another adult to move into the home for whatever reason, the landlord is entitled to more rent. Your agreement should stipulate that if another adult moves into the house without the leaseholder informing you, they are in breach of the contract. However, if they discuss it with you and both parties reach an agreement, charge an extra fee for that adult’s presence in the home. Faced with a choice between paying a small additional fee or facing lease termination charges, tenants prefer the former.
When contemplating additional fees, do not go overboard as it might make potential tenants wary of entering a contract with you. Instead, be reasonable and never negotiate on the implementation of these agreement clauses.