How To Increase Rental Property Income

Rental property income is just increased by raising rents. You can't just raise the rents arbitrarily, because if tenants leave, income goes down, not up. Always include everything in the rent. You'll avoid arguments about who owes what for utilities, or who watches the cable TV more. Cancel long distance, get a phone card, and just have local service. When utilities get too high, raise the rent. Just don't be tempted into "share" arrangements for anything.

Regulations in some places that prevent renting a rooms are rarely enforced, and are being legaly challenged more and more. It's tough to justify a system that allows parents with ten kids to live in a house, while discriminating against a household of three or four - just because they are unrelated. Look at the ads in the paper to determine what you can get for a room in your area. If there are several ads, renting rooms is probably common, and you'll be able to get numerous calls off of a two-day ad. Weekends seem to be the best time to run your ads.

How do you choose a renter? Use your intuition, and have a list of questions to ask. Take notes. Where does he/she work? What is there phone number? What family can you call in an emergency? You have to decide what you want for house rules, and be clear about what they are to avoid any issues. I personally won't allow pets, smoking in the house, or late-night noise. Everyone does their own dishes, and keeps any mess in their rooms.

Fortunately, there are other ways, including the ones listed below.

1. Consider raising the rent. We did dismiss ARBITRARY rent hikes as a cash-flow solution, but check on the rates for similar units. Are you renting at below-market rates?

2. Charge rent for extra parking space. I got tired of a renter's extra car, so I just started charging a weekly fee. Then I didn't mind so much.

3. Charge and enforce late fees. It's perfectly fair to have a fee for late payment of rent, and guess what? Those who are chronically late usually don't even mind - they just don't look at these things the same way as others.

4. Storage shed rentals. If your apartments are small, your renters may need a place to store their things. Don't let them spend their money elsewhere. Put a few sheds on the property and charge rent for them.

5. Coin-operated washing machines. If you don't have the money to do this yourself, you can find a company that will install them for you, and share the income with you.

6. Sell on a rent-to-own contract. Typically, there's a non-refundable deposit, and higher than market rents in these deals. When renters/buyers change their minds about buying, as they often do, you got the deposit and better cash flow. This is great when poor cash flow makes you want to sell. You either sell or get the better cash flow as you repeat the process.

7. Install vending machines. If your rental properties are large enough, others will do this for you for free, and give you a share of the income.

8. Rent by the room. A four-bedroom house might make more money if you include all the utilities and rent by the bedroom. This has made a lot of fortunes for investors in college towns. It does mean a lot of management, however.

9. Offer improvements for rent increases. If it's worth $25 more monthly rent to a tenant, install that dishwasher. Even on a credit card you'll pay less than that per month for it.

10. Reduce your expenses. List every expense of your rental properties, and look at them one at a time. How can you reduce them? Every cost cut goes straight to the bottom line of your rental property income.