7 Creative Ways to Earn More Money from Your Rental Properties
Are you searching for more creative ways to make money from your rental properties? If so, you’ve come to the right place!
In this article we will share with you several excellent tips that you can use to make more money from your rental properties and increase ROI.
1. Rent out an in-demand amenity, like a parking spot.
Matt Nagy is an investor, wholesaler, and owner of Homes4Income.com. Among his rentals is an ordinary, average property in Plant City, Florida. His returns would be so-so if it weren’t for 10 days every year.
During those 10 days (and when we’re not experiencing a pandemic), Plant City swells by 500,000 visitors for its annual Strawberry Festival. Otherwise easy throughout the year, parking suddenly becomes a precious commodity.
“During the 10 days of the festival, we bring in over $7,000 (cash) additional income from selling parking spaces on the lawn of the property.”
I can already hear the tenant activists working themselves into a tizzy: “What about your tenants?! Are they just expected to put up with a bunch of cars littering their lawn for 10 days?!”
Matt goes on to explain: “We offer the tenant a free month of rent and a cut of the proceeds that are collected. It’s a win/win for us and the tenant!”
The moral of this story is that it’s not about capitalizing on the occasional festival that hits your town (although you should do that, too). It’s about creativity, about thinking beyond just rents from your units.
Is there permanent demand for parking around your rental properties? Or perhaps occasional demand? What could you do to meet some of that demand?
It could mean installing a parking pad or parking lot. Perhaps one space comes included with the unit, and the other spaces are available to rent. Regardless, brainstorm ideas, with no idea dismissed until you’ve had a chance to look at it from all angles.
2. Offer additional storage at your rental properties
You’d be amazed how many people need extra storage.
People love their stuff. It’s hard for even “normal” people to part with objects they’ve owned for more than a few years, and we all know people who take that tendency to the “hoarder” level.
Does your property have space that’s not being used for much? A basement or cellar? An attic? A garage? Surplus office space?
Rent it out! In a multifamily building, you could rent extra space for an extra fee each month, whether to tenants or outside renters.
Among the benefits of leasing storage space is that it doesn’t come with the same headaches and regulations as residential units. An old couch doesn’t have the same legal rights as a family of four, so if the renters don’t hold up their side of the contract, turnovers are cheaper and faster for the landlord.
3. Become the utility by installing solar panels.
“Once upon a time, all electricity came from a government-sponsored monopoly called a ‘utility.’” So will begin a scary story I’ll tell my children one day.
But fortunately, the world is changing, and electricity is quickly democratizing. More power grids are becoming “smart” and allowing two-way transfers, letting properties with excess electricity sell it back to the utility.
Nor are property owners stuck with ugly, bulky solar panels any longer. New solar technology looks like normal slate or terracotta roof tiles and can be stored in powerful batteries.
That means landlords can install solar roofs and effectively become the utility. They can sell energy to the renters, and they can sell any excess to the grid.
If they don’t want to mess around with meters, they can just raise the rent and include electricity with it.
Are solar roofs a good investment for your rental properties? Only you can answer that based on the cost of installation, cost of electricity, your roof’s remaining lifespan, ROI, etc. But even if the math doesn’t make sense at this exact moment, consider that solar roofs are rapidly becoming more efficient and affordable.
I feel confident in saying that landlords will largely have replaced electrical utilities a generation from now. And that’s a great thing; it means clean solar energy at a rate inherently cheaper than the official utility offers (since renters could just use the utility otherwise).
4. Collaborate on an agricultural project.
Tenant farming is probably the second oldest profession. One person provides the land, another person provides labor, and they share the profits.
This is all well and good if you own a farm. But what about the majority of landlords out there who don’t?
It turns out the world is full of fun, sometimes funky examples of how landlords and renters collaborate on quasi-agricultural projects. Could you create a community garden with an affordable monthly fee per plot?
If you own a large apartment community or have a large lot with a central location, perhaps a mini farmer’s market?
Depending on your climate or soil, maybe your property could produce quality hops or grapes. You could sell the hops to local breweries (who are always looking to expand their authentic “localism” image). Even better, if you can sell grapes to local wineries, the prestige of advertising a “vineyard home for rent” is enough to send the rent through the roof.
Or get really weird and creative. Consider Jeff Neal, who raises and drop ships live crickets through his business at TheCritterDepot.com. “I worked for an e-commerce company before and was still very interested in starting my own niche drop ship company. And after some research, it was apparent that crickets were the only solution.”
There is truly a niche for everything!
5. Offer property-related services.
Ever thought about offering lawn-mowing and landscaping services to your tenants? Perhaps housekeeping/maid services?
No, you don’t need to get down on your hands and knees and start scrubbing bathtubs yourself (although you could). You can instead find a good local servicer, whether a solo operator or a small business, and partner with them. In exchange for a cut, you offer their services to your renters.
It can even be a differentiating amenity. In your rental properties listing, you can advertise “regular maid services available through property.”
These services aren’t just for large multifamily buildings. Remember Matt, who doubled his returns by offering parking for the Strawberry Festival? For his single-family rentals, he provides landscaping and pool servicing through a local partner. “While it only produces a small net profit, it ensures the pool and lawn are properly maintained, the property value kept up, and the neighbors happy.”
That goes double for housekeeping services—not only will you earn some extra money, but you’ll know the properties are being maintained and kept clean.
6. Go above and beyond by adding convenience services.
Who says you have to stop at property-related services?
The sky is the limit with the convenience services that people need (or want), whether they currently use them or not. Babysitting services, dog-walking services, dry cleaning services, even concierge services—if you can make these affordable and convenient, a surprising number of your renters will jump on them.
While these convenience services have been gradually gaining ground in the multifamily industry, you could implement them for single-family rentals as well, especially if your properties are near one another. All you need are willing local partners.
Again, these don’t even have to be businesses. Why not find a hard-working individual and cut out the middle-man? For that matter, what about your own children, neighbors’ children, or nieces and nephews? You could teach them about entrepreneurship, while putting extra money in everyone’s pockets.
7. Charge more for furnished units.
Not everyone wants a furnished or semi-furnished apartment, but those who do will pay more for it.
In other words, it’s a niche market, and we all know how the line goes: “There are riches in niches.”
Furniture is one of my favorite things to buy used. It loses an incredible amount of value as soon as it goes out the storeroom door, yet it can maintain its functionality and aesthetic value for years (often decades) to come.
When renters move into a furnished apartment, they don’t expect to be the first people to have ever used the furniture. Buy used furniture on Craigslist, from friends and relatives, or at consignment shops for cents on the dollar.
You can raise the asking rent of course, but just as important, furniture justifies a higher security deposit.
If furnished units have a downside, it’s that renters tend to stay for shorter tenancies. People who put down roots will buy their own furniture. As always, know your market before diving into a niche.
Contact RPM Central Valley
At RPM Central Valley, we specialize in local property management. To learn more about the services that we can offer you for your rental properties contact us at (209) 572-2222 or click here.