If you currently own a rental property, and your revenue is covering your expenses with a little extra to put in the bank, that’s awesome! But what if you could bank even more each month by simply thinking outside the box? What if you could increase your net revenue to double what it is right now?
Would you be interested in that?
There are so many ways to add value for your tenants that they would be willing to pay extra for. You can also get creative and utilize your property to create more income in other ways. All it takes is a little creativity and looking at things in a different way.
If you own a property in an area where parking is a high commodity, this is a no-brainer. Whether you’re in the city where people have to search for parking, or you’re close to a sports or music venue, you can cash in on it. And don’t worry, you can take care of your tenants, too!
Let’s say you own a single family home near a football stadium. If there is enough grass, a large driveway or otherwise, you can use that space and sell parking spots for a premium to the fans who are attending the event. All it takes is a sign with your price on it and someone to collect the cash and direct the cars to the right spots.
You can make this an attractive deal for your tenant, as well. Obviously, you need to ensure that they still have space to park during the events. After that, you can offer a portion of the profits to them, waive one month of rent, or any other offer that they might accept.
The key is to make it a win-win for both of you. If you’re both making money off the deal and it doesn’t destroy the property, go for it!
It should come as no surprise that people LOVE their stuff, and that some take it to an extreme level to the point that they can’t fit everything in their home. This can be a major advantage for you if you choose use the opportunity as a money-making venture. The major concern is whether or not you have the space to rent out.
Renting additional space works really well when you own a multi-family property. The living spaces are likely smaller than in a single family home, which means people will be looking for extra space to store their things. You can sell storage space to them in garages, attics, basements or extra units in the building. If you’re super savvy, you can make it a goal to own a multi-family property and a storage building that are next door, or in close proximity to one another.
If you own a single family home, it can be a little more complicated, unless you have another spot nearby. This works really well when you’re renting a carriage house, an apartment over your garage or a mother-in-law suite. These situations almost always have a larger house connected or on the same property, which gives you the opportunity to rent additional space.
This might seem like an odd one, but you really can make it work to your advantage. Installing solar panels on the roof of your rental property can be a major cash cow for you. You need to first do the research on whether or not it’s a good investment for you by considering the amount of time it will take to recoup the cost and how old the roof is at the time of installation.
Once you decide that it’s a good investment, you can get it done and start making some extra money. There are multiple ways to accomplish the same thing, too.
One option is to install the solar panels and then increase the price of rent to include electricity. You then ultimately become the utility, and your tenants will pay you instead of the electric company. Whether it’s a single or multi-family establishment, you are likely to create enough energy to cover everything that is being used and have some left over.
Since power grids are becoming smarter and smarter, many of them now offer a two-way transfer. This means that if you have excess power after running all the necessary electricity at your property for the month, you can sell the rest back to the grid. This is not an option that you would do “instead of” selling to tenants. It would be “in addition to”.
There are more than 40 states in the U.S. that allow this type of transfer. It’s called “net metering”. Not only will you receive a check from the power company for the excess energy, you can also get some great tax benefits, as well. Start by checking with the power company in your area to find out if this is an option for you.
Many people are willing to pay for convenient, time-saving services in and around their homes. Depending on the expendable income of the tenants in your property, this could be a really creative and smart way to generate more income. Think about all the different services that you, your family and friends use on a regular basis. Can you recreate them?
Each of the following is an example of a service that you could offer to your tenants for an additional fee. You can choose to offer them a la cart, or as a package deal. You can also include them in the rent, or have your tenants pay separately. Either way, it’s worth considering!
Offering lawn services like grass cutting, tree trimming, gardening, wedding, fertilizing and more is a great place to start. There are tons of people who don’t have the time or the desire to do these sorts of jobs around their homes. If you have the ability to do it yourself or to sub-contract it out, it’s definitely worth considering.
This is another really great option to not only serve your tenants, but to generate additional revenue for your business. Consider the cost of doing it yourself versus hiring a company to do it and conduct a basic ROI evaluation. If the numbers look good, give it a try and see how it goes.
If you really want to go above and beyond, you can partner with a local dry cleaner to offer a pick-up and drop-off service for your tenants. In this scenario, your tenants could leave their dry-cleaning on the front door for the cleaner (or you) to come pick it up. Once it’s done, it is delivered back to their door. This is a convenient way to do additional business with your tenants and they will appreciate it, as well.
Think about all the apps and grocery stores that offer this service! Can you find a local business who is currently doing it, or setup one for yourself and hire someone to do it? It might take a little more setup time to get this to work, but it’s definitely an option worth exploring. Home grocery delivery is a rapidly growing service that you could cash in on.
Although there are lots of dog-walking apps and services on the market, your tenants are likely to trust whoever you recommend for these types of things. You can offer dog-walking on a daily basis, as well as pet-sitting when your tenants go on vacation. This allows the pet to stay comfortable at home, rather than being boarded at a kennel and gives the tenant peace-of-mind that their furry friend is well taken care of.
If you have a really great relationship with your tenants, they might even trust your recommendation on who should watch their kids. Whether it’s your own teenagers who are looking to make some cash, or you hire a contractor to do it, this is another excellent service. Parents are always looking for a great babysitter to take care of the kids while they take a night off. And who better to help them with it than you?
Obviously, all of the options listed above will take some due diligence, planning and potential bargaining with local service providers. If that’s not something you’re interested in doing, there are other ways to ensure you are making top dollar for each property you own.
This is one of the best ways to increase your net income each month. We all know that the market fluctuates on a regular basis. We go through periods where interest rates are through the roof and others where they are amazingly low.
If you really stay on top of the market and what it’s doing, you’ll be in a great place to refinance at just the right time. If you get a great deal and don’t spend a ton on closing costs and other fees, you can really improve your revenue situation substantially.
It’s really helpful to shop it on an annual basis, too. Just like car insurance and other such necessities, many people become complacent and just pay their premiums year after year without ever shopping around. Be smart about it and always be on the lookout for what might be the right option.
A great way to accomplish this is to start by finding a lender whom you trust. If you have a lender or an advisor who can help you identify the right time to refinance, that’s worth its weight in gold. Ask them to reach out to you when the market is primed for great refinancing deals. Don’t worry – you’re not an inconvenience. I promise you, they have a list of prospects to call when the market is at just the right spot.
This is another area where many investors are under informed and don’t get the full tax benefit of their properties. We don’t recommend trying to figure this out on your own unless you’re a tax professional. But we DO recommend looking in to the matter by contacting a tax professional and discussing all of the options.
More often than not, investors will learn about additional tax benefits they didn’t know they had. These can be the result of renovations that you made to the property, energy-efficiencies that you added but didn’t realize you could get a break for, and so on. Your best bet is to keep really good track of all the improvements and investments you make to the property. Then share those with your tax advisor every year when you file your taxes. You’ll be amazed what is possible.
The key to all of this is just learning to think outside the box. Don’t get complacent as an investor and think that the monthly rent from your tenants is your only opportunity. The sky is the limit when it comes to offering additional services and amenities that your tenants might be willing to pay for.
Always do the research on the potential ROI, the costs associated with the service or services you want to offer and what type of insurance may or may not be necessary. If you think insurance will be necessary for the service you want to offer, bid that out, as well. Go into the decision with as much information as possible for optimal results.
Hopefully, this article has sparked some ideas for you. As an investor, you are the CEO of your real estate business and you get to call the shots. The more creative and forward-thinking you can be, the better. Not only will you be able to make more money from your rental properties, but your tenants will have the pleasure of convenient services that are offered from the same person they trust – YOU!
Charles Carillo is the founder and managing partner of Harborside Partners. He has invested in over $25 million worth of real estate, in several states, and has extensive knowledge in renovating and repositioning multifamily and commercial real estate. Charles holds a BS from the Connecticut State University.