When you’re an owner of rental property, adding to your rental income can be significant for improving cash flow by reducing your expenses. There are dozens of ways to legitimately increase your revenue and reduce your property management cost, but a handful can be especially impactful with minimal effort required.
Most Common Ways to Increase Your Rental Income
First, acquiring the perfect tenant is the primary goal. You don’t want someone who would damage or neglect taking care of your property. You need a tenant that pays rent on time, doesn’t give you hassles and obeys the rules and regulations. Having property management fees is more of a necessity than just a smart business practice. You may not need to apply all the suggestions to your entire portfolio, but the options are listed.
This fee will cover your time for gathering the information and your administrative fees. Even if the potential renter is rejected, the fees are non-refundable. There may be monetary limits on what you can charge in your state, so be sure to research what the maximum is.
It’s essential to run a criminal and eviction background check on anyone who wants to rent from you. It has to be run on anyone who is moving in, not just the person signing the rental agreement. The cost can become expensive for every potential tenant so passing that expense onto the person who wants to rent from you is perfectly legal.
When a tenant is paying rent late, then there should be a late fee charged. It is especially true if the rent is paying the mortgage on the property.
You can also include in your rental agreement an early termination fee for when tenants move out early and break their lease.
Some landlords include a fee for water usage from a tenant. Usually, the water bill is calculated, and then the cost is passed onto the tenant.
You can have your tenant to pay a one-time parking fee when they move in. Alternatively, you may charge a monthly fee or yearly to cover the cost of parking. This fee usually reserves that spot for that particular tenant, but it could also be used for upkeep of the parking area.
Some property owners will have a trash pickup fee included in the rental agreement. It saves on the renter, hiring someone, or ignoring that the trash will need to be removed. By adding the trash removal in the rent fee, it helps to keep the garbage from building up where you don’t want it.
Why Late Fees Should Be Considered
Some property managers don’t collect late fees or extra fees, such as pet rent. In the long run, it will cost you more if you don’t collect them. However, late fees must be applied to everyone equally and consistently. Late fees shouldn’t be considered as a ‘moneymaker.” If your tenant is habitually behind with the rent, it can affect your other financial obligations. Delegate a reasonable amount of time and amount in your rental agreement. Keep it the same for all your tenants and all kinds of situations. It will help to keep that monthly rental check appearing promptly. Pet fees should be collected because of the potential damage that a pet may or may not do to the property.
More Ways to Create Revenue
There are other ways to create revenue by enforcing property management fees and property management cost. Requesting a security deposit before the tenant moves in and is the equivalent of one to two months’ rent. You could also charge a move-in fee which covers changing the locks, switching names on the buzzer or mailbox or updating the building directory.
Before you add new fees to your rental agreement, check your federal and local laws for regulations. If you don’t follow the regulations, you can end up with legal issues.
By charging legitimate fees for rental properties, you can get more money out of your investments.
Are you thinking about adding fees to your rental property? Let us know in the comments!