3 Effective Tactics to Boost Revenue From Your Rental Property
The usual tactics to boost revenue from property rental is acquiring as many properties as possible. While this may be a valid method for those who are in the property business per se, when it comes to “regular” people that have just a few properties to rent, a better approach would be to focus on their current portfolio and see what they can do to earn more without investing more. Let’s talk:
Turnover is one of the worst things for everyone in the property rental business. Every turnover costs money and going through tenant after tenant will cost you more than you’ll earn. Apart from advertising costs, there are costs of vacancy, patching and painting walls, replacing and repairing flooring, or fixing anything else left broken by your previous tenant, etc. But, how do you minimize turnover and keep the right tenants in place? There are several points to it:
• Lowering the rent: Although this may sometimes be counterintuitive, it does show the tendency to increase revenue, long-term and here’s why. When tenants don’t have to pay high rents, they appreciate the place they live in and usually tend to keep it in good shape as if it were their home. Also, they are less likely to leave.
• Customer service: Whether you have a property manager or personally manage your properties, you’ll keep your tenants in place if you treat them with respect. The more professional you are, the longer they’ll stay, meaning – make sure their concerns are valued and their reasonable requests dealt with straight away.
• Open agreement: It’s in your best interest to keep your tenants in place so make sure you stay away from shady deals, unclear arrangements and, well, lies. Stick to the agreement you initially made with your tenant and be open to suggestions, changes, etc. When your tenants know you can be trusted, they are likely to stay around for a long time.
• Increase rent strategically: After having told you lower rents are king, we have to explore rent increase as well, because, let’s face it, you’ll have to increase the rents eventually if you have a valid reason. Also, your tenants shouldn’t expect the rent never to increase; what they should expect though is a strategic and open approach to the increase. If feasible, inform your tenants right away of potential rent increases over, so they’re not surprised when the day comes.
To minimize vacancies loss, try to find a long-term tenant who pays regularly and has a stable source of income. If it happens that your tenant has to move, you can minimize vacancy by keeping turnaround time to a minimum. For instance, if you are renting out a condo to two people and one of them has to leave, the best way to keep your occupancy at virtually 100% is by posting ads the minute you learn of your tenant’s move. That way, whether your property is in a good neighborhood or one with lower demand, you’ll have interested parties looking to book a room in your apartment.
Add Revenue Streams
If you are running multi-family properties, add services like coin-operated vending machines, laundry and other useful services that will add resale value by raising the property’s return on capitalization rate or asset value. Plus, they’ll be super convenient for the tenants.
Boosting rental revenue can be achieved by operating a smaller number of properties as long as you’ve got an intelligent approach to the matter.