SS272: How to Increase NOI Without Raising Rents

SS272: How to Increase NOI Without Raising Rents

Increasing net operating income is key to boosting your property’s value. In this episode, Charles discusses how to increase your property’s NOI without raising your tenants’ rent.

Watch The Episode Here:

Listen To The Podcast Here:

Talking Points:

  • When the real estate market is hot, transactions are high, buyers are purchasing apartment buildings, dumping all types of renovation dollars into them, and raising rents. When the market cools, this is where investors need to get strategic with their operations. I have a friend who is a financial advisor, and he would tell me that during a bull market, people can buy anything and make money, but in a bear market, it is easier to find clients because that is where it takes knowledge and experience to make money and this is similar to raising the net operating income of your property without raising rents. Let’s break down strategies to improve cash flow while protecting occupancy.
    • 1.  Reduce Vacancy and Turnover Costs. This is always the big one. Reach out to your tenants months before their renewals come up. Replace their old stove or that old dishwasher to push for that lease renewal. You are renewing their lease while also minimizing future issues with that appliance for many years. Also, try to trim the time and cost it takes to make an apartment rent-ready. Stop doing major renovations, just fix, paint, clean, and rent.
    • 2. Review Expenses. Can you put any vendor contracts out to bid? Can you challenge your new property tax increases? When was the last time you shopped for your property insurance? Are your utilities sub-metered for every unit? Can you streamline any processes with tech? Be very careful when considering changes to staffing and vendor contracts.  You need to ensure the quality of service provided to tenants improves after any changes. 
    • 3. Tighten up Collections. Start enforcing those late fees. Start notices and evictions sooner than before. Ensure every tenant has renters’ insurance. Becoming more aggressive with back rent and with tenants who break the terms of your lease will help increase your NOI.
    • 4. Increase Other Income. Can you offer internet to your tenants through a local provider? Do you charge pet fees? Do you charge application fees? Can you lease anything else of value on your property, like better parking spots, covered spots, or garages? Can you lease any other part of your property out? Maybe to another business, for a billboard, for storage, or for offices? Do you have vending machines?
  • Yes, you should focus more on pushing rents and revenue rather than trying to cut expenses, but incorporating better operations, smarter expense control, and additional income streams can help grow or maintain your NOI in a market experiencing little to no rent growth.
  • If you want to learn how to increase your NOI in the first 90 days of owning a property, check out episode SS269.

Transcript:

Charles:
What if I told you that you don’t need to raise rents to increase your NOI? I’ve owned properties in strong and slow markets, and when rent growth disappears, operations become everything. Most investors try to renovate their way out of a slow market—but the real gains usually come from tightening the basics.

New Speaker:
Welcome to Strategy Saturday! I’m Charles Carillo and today we’re breaking down how to increase NOI without raising rents, especially when the market cools and the easy winds disappear. Let’s get started. When the real estate market is hot, transactions are high. Buyers are purchasing apartment buildings, dumping all types of renovation dollars into them and raising rents. When the market cools, this is where investors need to get strategic with their operations. I have a friend who is a financial advisor, and he would tell me that during a bull market, people can buy anything and make money, but in a bear market, it’s easier to find clients because that is where it takes knowledge and experience to make money. And this is similar to raising the net operating income of your property without raising rents. Let’s break down strategies to improve cash flow while protecting occupancy. Number one is reduce vacancy and turnover costs, and this is always the big one.

Charles:
Reach out to your tenants months before the renewals come up. Replace the old stove or that old dishwasher to push for that lease renewal. You’re renewing their lease while also minimizing future issues without appliance for many years. Also, try to trim the time and cost it takes to make an apartment rent ready. Stop doing nature of renovations. Just fix paint, clean and rent. Number two is review expenses. Can you put any vendor contracts out to bid? Can you challenge your new property tax increases? When was the last time you shopped for your property insurance? Are your utilities sub-metered for every unit? Can you streamline any processes with tech? Be very careful when considering changing anything to staffing and vendor contracts because you need to ensure that the quality of service provided to tenants improves after any changes. Number three is tighten up collections. So start enforcing those late fees.

Charles:
Start notices in evictions sooner than before. Ensure every tenant has renter’s insurance. Becoming more aggressive with back rent and with tenants who break the terms of your lease will help increase your NOI. Number four is increase other income. Can you offer internet to your tenants through a local provider? Do you charge pet fees? Do you charge application fees? Can you lease anything else of value on your property, like better parking spots, covered spots, or garages? Can you lease any other part of your property out maybe to another business for a billboard for storage or for offices? And do you have vending machines on site? Yes, you should focus more on pushing rents and revenue rather than trying to cut expenses, but incorporating better operations, smarter expense control, and additional income streams can help grow or maintain your NOI in a market experiencing little or no rent growth.

Charles:
If you wanna learn how to increase your NOI in the first 90 days of owning a property, check out episode SS 269. I hope you enjoyed. Please remember to rate, review, subscribe, submit comments and potential show topics at globalinvestorspodcast.com. If you’re interested in actively investing in real estate, please check out our courses and mentoring programs at syndicationsuperstars.com. That is syndicationsuperstars.com. Look forward to two more episodes next week. See you then.

 

Links Mentioned In The Episode:

  • SS272: How to Increase NOI Without Raising Rents

Are You a Fan? Subscribe, Rate, Review & Share – Click Here To Learn How

What question do you always wish I would ask but I never do?

Connect with the Global Investors Show, Charles Carillo and Harborside Partners:

Scroll to top