3 Ways to Increase Rental Income

Written By Amelia McGee

If you’ve stopped or slowed down on buying due to interest rates climbing, it’s important to still be able to capitalize on what you already own! Here are a few of our favorite ways to maximize cash flow with properties we already own!

RUBS - Ratio Utility Billing System

For multifamily properties that share a utility meter, a Ratio Utility Billing System, aka RUBS, is a great way to charge utilities back to each tenant. The Ratio Utility Billing System (RUBS) is a method used by landlords and property managers to allocate utility costs among tenants in multifamily housing units, such as apartment buildings or condominiums, where individual units are not separately metered for utilities like water, gas, or electricity.

Under RUBS, the total cost of utilities for the property is divided among tenants based on a predetermined formula, typically taking into account factors such as the square footage of each unit, the number of occupants, or other relevant variables. This allows landlords to fairly distribute utility costs among tenants without the need for individual metering.

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Keep Tenants Happy

If you’re not aware, turnover is the biggest cash flow killer. If you keep your tenants happy, they are more likely to stay longer, thus reducing your turnover, maintaining your rental income, and lowering your expenses! Regular communication, responsiveness to concerns, and addressing any issues that arise can help you foster positive relationships with your tenants and ensure their happiness and satisfaction. By prioritizing tenant well-being, landlords can create a harmonious living environment and promote long-term tenant retention.

Rent by Room

"Rent by Room" is a housing arrangement where tenants rent individual rooms within a larger property, such as a house or apartment, rather than renting the entire property as a single unit. You might’ve heard about it in relation to “House Hacking,” which is the overall strategy of renting out portions of your property. “Rent by the Room” is common in college towns, and is often more profitable than renting the whole house as one.

You can even “Rent by the Room” and combine it with the midterm rental strategy (MTR)! Check out our MTR Profit Academy to learn all the ways an MTR can boost your rental income.

In addition, when you offer tenants to “Rent by the Room,” you’re not only increasing your rental income as a landlord, but you’re also providing more affordable options for renters, flexible leases (typically month-to-month leases), and the opportunity to create a unique community with housemates.

Coin Laundry

Adding a coin-operated laundry in a small multifamily unit is a great way to add revenue and increase market value. There are several benefits to having a coin laundry in a multifamily housing complex:

  1. Convenience: Having a coin laundry on-site saves tenants the time and hassle of traveling to an off-site laundromat. They can easily do their laundry within the comfort of their own building.

  2. Accessibility: Coin-operated laundry facilities are accessible to all tenants in the building, regardless of whether they have laundry hookups in their individual units. This ensures that all residents have access to laundry facilities, regardless of their housing arrangements.

  3. Additional Income for Landlords: Landlords or property managers can generate additional revenue by charging tenants to use the coin-operated machines. This can help offset the cost of maintaining and operating the laundry facility.

  4. Competitive Advantage: Offering on-site laundry facilities can be a selling point for multifamily housing complexes, attracting potential tenants who prioritize convenience and amenities.

  5. Control Over Maintenance and Upkeep: By managing the laundry facility themselves, landlords can ensure that the machines are properly maintained and serviced on a regular basis, ensuring optimal functionality for tenants.

    Overall, a coin laundry can be a valuable amenity for tenants in multifamily housing complexes, providing convenience and accessibility while also generating additional income for landlords.

Pet Fees

If you feel comfortable allowing pets, this can generally increase your monthly revenue by $25 - $40. These fees can take various forms and serve different purposes. Here are a few common types of pet fees:

  1. Pet Deposit: A pet deposit is a one-time, refundable payment made by tenants to cover any potential damages caused by their pets during their tenancy. The deposit is typically returned to the tenant at the end of their lease term, provided there is no damage beyond normal wear and tear.

  2. Pet Rent: Pet rent is a recurring monthly fee added to a tenant's rent to cover the cost of having a pet in the rental property. This fee is non-refundable and is paid in addition to the base rent. Pet rent may vary depending on factors such as the type and size of the pet.

  3. Non-Refundable Pet Fee: Unlike a pet deposit, a non-refundable pet fee is a one-time payment that tenants are required to pay upfront when they move in with a pet. This fee is typically not returned to the tenant at the end of their lease, regardless of whether there is any damage caused by the pet.

  4. Pet Cleaning Fee: Some landlords may charge a one-time pet cleaning fee to cover the cost of cleaning and sanitizing the rental unit after the tenant with a pet moves out. This fee is intended to restore the property to its original condition and remove any traces of pet-related odors or allergens.

The purpose of these pet fees is to compensate landlords for the potential risks and expenses associated with allowing pets in rental properties, such as property damage, increased maintenance costs, and liability concerns. Additionally, pet fees can help landlords offset any additional insurance premiums or pet-related amenities provided to tenants.

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Storage or Garage Space

Another way to increase revenue by $50 - $100 each month is through storage and/or garage space. Providing storage and/or garage space to tenants in rental properties can offer several benefits to both landlords and tenants.

Having access to storage/garage space on-site provides tenants with a convenient, secure, and weather-protected place to store belongings, vehicles, or recreational equipment without the need to rent additional off-site storage units.

As a landlord, offering storage or garage space as an amenity can make a rental property more attractive to potential tenants, helping landlords attract and retain tenants more effectively. Plus, the additional revenue generated requires very little work or maintenance from the landlord in terms of up keeping the garage or storage spaces.

By implementing these strategies and staying proactive in managing your rental property, you can increase rental income and maximize the return on your investment with the properties you already own! Remember, it’s essential to balance income generation with maintaining a high standard of property management and tenant satisfaction to create a win-win situation for all :)

RESOURCES:

Amelia McGee
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