A little bit goes a long way.
Have you ever wondered if you could boost the profitability of your rental units? Try out these ideas and see if they’ll work for any of your properties. You might not be skyrocketing your income, but a few extra dollars each month can really add up over time, especially if you can implement these ideas in multiple properties!
Offer partial months
Not every landlord is willing to do this, but it’s something that tenants can really appreciate—and it can help you make a little more money too. If you found a great tenant but their existing lease isn’t over for another month, offer to sell them a half-month. Here’s how it works: the property will be vacant for 2 weeks, and the new tenant’s lease will start midway through the month. For the second half of the month, the tenant will essentially have two places, but it benefits them because they can move in and out at a relaxed pace and have extra time to clean their old place. Moving trucks are cheaper halfway through the month than they are at the beginning and end, so they’ll save a bit of money there too.
It’s a win-win for both of you and it lets you get the good tenant without losing a whole month’s rent. Getting a good tenant is a whole cost-saving measure in itself, because a poor tenant is one of the fastest ways to rack up huge expenses.
Rent out spaces separately
Renting out spaces separately could mean a number of things: converting a basement into a separate unit in a single-family home, for example, or renting out a storage shed. Some people who own acreages will rent out the house to one person and the barn or pastures to another person, allowing them to make a few extra dollars. If there’s an opportunity to rent a space separately, do it. Don’t let useful space go to waste.
We recently talked to a landlord who rented out a home to college students. While the home fit 5 students easily, it only had a 2-car garage, and everyone else would have to park outside. In order to minimize the “who gets the garage” debate, he always charged an extra $20/month for the garage space, arranged at the time of signing the lease. Whoever was willing to pay would get the garage. It had worked for several years, but one year, none of the students were willing to pay that $20/month—they all preferred parking outside rather than paying an extra fee. So, what did he do? Rather than letting the garage sit empty, he rented the space out as storage and got $50/month for it! He got a little extra money in his pocket, and it all went straight to profit because the garage didn’t require any utility or maintenance costs.
Add a coin-operated laundry
If you own multi-family units that do not have washers and dryers in the units, adding coin-operated laundry is a good way to make some extra cash. Even if each unit has a washer and dryer, you could put extra-large machines in a common area and many people would be happy to pay a few dollars for the convenience. It’s great for your tenants because they don’t have to drag their clothing to and from the laundromat. Just make sure your price per load is competitive with the prices of the nearest laundromats… if the laundromat is farther away you can upcharge a bit for convenience, but if there’s one down the block, you’ll want to match its prices. Another tip: tenants will really appreciate a change machine in the laundry area.
As long as you properly maintain your coin-operated laundry machines they should pay for themselves quickly and last a relatively long time. It can even be a selling point when you’re looking to fill a vacancy.
Add vending machines
Vending machines are a good way to generate a little bit of extra cash flow each month. They won’t work for every rental situation, but for multi-family units that don’t offer any stores within walking distance, they are excellent. You can sell snacks, drinks, and other small items. Even a small and inexpensive gumball machine is something, and it could make you a couple dollars each month and pay for itself very quickly.
You can make a pretty good profit margin with vending machines. In most cases, tenants will be happy to pay for the convenience, and you can make a little bit of extra money each month once you’ve paid off the initial cost of purchasing the machines.
Some landlords have absolutely no issue with this one. Others struggle with enforcing rent collection, late fees, and other fees. If you’re in the latter camp, remember that it’s within your rights to enforce the terms of the lease. The tenants signed a contract, and they’re responsible for paying up. It’s OK to give people a break sometimes, but you’re definitely not a mean landlord if you charge for things like extra tenants, late fees, and maintenance costs that aren’t covered by the lease.
If you charge for extra tenants or pets and you find out your tenant has let another adult or a pet move in without your knowledge, make sure to charge them for it. If they are late on their payment, charge them the late fee, especially if it happens more than once. And if your maintenance team gets called out to the property and subsequently charges you for something that isn’t covered by the lease, send the bill to your tenant! You’re running a profitable business, and your tenants have signed an agreement. If you really feel you should give them a break, go ahead—but in many cases it’s important to hold them to it.