As we move into the new year, now’s a great time for landlords and property managers to reexamine budgets and explore additional revenue generation opportunities. From providing furnished rental options to investing in property management software, there are many creative ways you can make the most of your property's infrastructure and amenities to both attract and retain tenants.
With strategic investments, you can reap a significant return on investment and unlock new revenue streams that will provide income for years to come. If you’re a property owner looking to increase your rental income in 2023, here are our top ideas to get your started:
Provide Furnished Rental Options
Offering furnished rental options can make your property stand out in a crowded market. Many prospective tenants, such as travel nurses, vacationers, students, and remote workers, are looking for furnished spaces that they can occupy for a set amount of time. This is a great way to increase your tenant application pool, especially if you’re willing to offer more flexible lease terms. Furnished options can also typically demand higher rent as renters are paying for the convenience and comfort of moving into (and out of) a turnkey residence.
Depending on lease terms, furnished units may also require less maintenance as tenants can be responsible for the furniture and other items in the space. This can reduce your workload as a landlord. Before you make that trip to IKEA, just be sure to research your target market and tailor furnishings accordingly. Creating an inviting, modern space will help you stand out and attract more prospects.
Replace Inefficiencies and Invest in Upgrades
While remodeling units and replacing outdated fixtures can be costly, there are many advantages to offering tenants truly modern, updated housing options. For one, upgrading to energy-efficient appliances can help save money on energy costs and attract tenants who are conscious of their environmental impact. Some may also be willing to pay a premium for eco-friendly options. Additionally, your maintenance staff will spend less time (and money) on maintaining outdated refrigerators, dishwashers, and washing machines.
Larger upgrades such as new roofs, siding, and windows can also increase the value of your property, which can help you justify higher rental prices. And with a new face lift, your building will have more curb appeal, making it stand out from the pack. Once prospective renters tour your upgraded units and see modern facilities, it’ll be hard to resist signing that lease. With more desirable amenities, you’re likelier to see higher occupancy rates, which only means more rental income over time.
Continually Check Market Rates
Savvy landlords know that the rental market is constantly changing. Even if your zip code isn’t considered to be a hot rental market, it's still important to stay informed of the current market rates in your area. By keeping up with trends and fluctuations in lease prices and terms, you can ensure that your offerings are competitive. If you notice that your property is below market rate, you may want to consider increasing rent for new and existing tenants. However, it's important to be aware of local laws and regulations related to rent increases and to ensure that any increases are fair.
When contemplating changes, just be conscious of what’s reasonable considering your property and tenant population. For example, more luxury-marketed properties with modern amenities will be able to charge higher rent than a similar, nearby property without those amenities. Existing tenants may also balk at staggering rent increases, especially if they can relocate somewhere nearby at a lower rate.
Add Additional Revenue Streams
It’s easy to overlook how easily additional revenue can be generated by utilizing existing infrastructure or making simple investments in services and amenities. For example, If your property is in a high-traffic area, you can consider renting out space for advertising. Offering space to a outdoor advertising company or lending a side wall to a billboard can generate extra funds with limited investment on your end. The same logic applies to any additional space you have on site. Got a large basement or garage? Find a way to rent it out as storage space. Got a number of unused parking spaces? Local businesses or visitors who need parking in congested areas might be willing to pay for those.
Perhaps the biggest growing revenue stream for property owners is through pet rent. Adding a pet friendly policy on your property could mean significant additional monthly income in the form of pet-related chargers. These can be upfront charges for each pet they have, for maintenance of on-site pet accommodations, or deposits that you are entitled to use in the event of pet-related damage and repair costs.
Although it requires a bigger budget, adding amenities such as a hot tub, swimming pool, or fitness center to your property can mean additional revenue streams. You can charge tenants extra fees for access to these amenities on a monthly or per-use basis. If it makes sense for your property, services such as laundry, housekeeping, or pet sitting can also provide additional revenue streams.
Invest in Property Management Software
Perhaps the greatest return on investment available to you as a property manager is investing in a property management software package to help you run your business. These solutions can help you streamline your operations by automating tasks such as tenant screening, rent collection, and maintenance scheduling. This ultimately saves you both time and money. There are even some products, such as OurPetPolicy, which can help you manage and screen pets on property.
Some software options also offer automated rent reminders, late fee notices, and eviction notices to help you stay on top of payments and potential revenue streams. Additionally, these tools often include valuable data and analytics around occupancy rates, vacancy rates, and revenue trends, which can help you make more informed decisions about your properties and increase your rental income over time.
With an uncertain economic environment on the horizon, now’s the time to make investments to be sure you’re maximizing potential revenue in 2023. Offering furnished rental options, investing in upgraded fixtures and amenities, and continually checking market rates can help ensure that you’re attracting a wider pool of potential renters who are willing to pay for the amenities available to them.
If you’re looking for an immediate return on investment, property management software is a no brainer. Not only can it help you streamline your operations and improve tenant retention, but it can also help you increase revenue and better market your property to new tenants. With the use of property management software, landlords have a better control and management of their properties, which can only increase rental income over time.