Making good money on your rental property is no easy business. As a landlord, you must deliberately and, sometimes even painstakingly, cover all the reasons that could lead to lower performance. You’ve already got a lot to deal with - eviction laws, government taxes, unemployment issues, and whatnot.
If a recent review of your rental yield revealed that you’re not on top of your game, it’s time to push the envelope on higher rents. Without raising your property’s rental value, you’re essentially stagnating, or perhaps even dwindling your revenue - what with all the inflation, higher financing fees, and growing maintenance and repair costs.
But can you afford to increase your property’s rent without affecting occupancy?
From changing your business attitude to increasing your property’s value, there’s actually a lot you can do! Here are 8 simple yet effective strategies that can help you boost the income your rental generates.
1. Rent by the room
If your property has multiple rooms, it’s natural that the rent is high. But higher rents usually come with difficulty in finding tenants. Increasing rent in such a case can be risky as it can lead to long periods of vacancy. And we all know - vacancies are the landlord’s nightmare!
Consider renting your property by the room instead of as a whole. By doing this, you can target a wider tenant category (like students and young professionals), and offer each room at a lower rent.
This is a tremendous win-win strategy, especially in cities like New York, Chicago, Los Angeles, Toronto, etc., where rents tend to skyrocket and where there’s a huge population of students and single, young people trying to find the cheapest housing options. You can offer them affordable rents while also increasing your overall income.
For example, let’s say you have a two-bedroom apartment with a market rate of $2600 - a rent that only a narrow category of tenants (like a small family) can afford. So instead, you rent it out to two tenants at $1600 each. This way, you can attract a new tenant category at an affordable price and hike your overall rent by $600! Plus, you don’t need to worry about losing income on long vacancy periods, either.
2. Increase the number of rooms using partition walls
If your property has a large living space that isn’t really necessary, turn it into a room to convert your one-bedroom condo into a two-bedroom condo or a two into three. This strategy can significantly improve your rental income, especially if you’re renting by the room.
By adding an extra room within your property, if your one-bedroom condo was earlier yielding a $1200 rent, your new two-bedroom condo can now yield an easy $1600-1800!
Splitting a room into two doesn’t have to be a hassle, either. You don’t necessarily have to go into all-out reno mode and get a contractor involved. Modular partitions like this Mounted Partition Wall with Door can be incredibly useful. It’s a DIY partition wall that looks like a real wall and comes with a door so you’ve basically got everything you need to add that extra room! Assembly’s a breeze and the modular wall comes in customizable sizes too.
Need help adding an extra room to your property? We can help you draw out a plan and figure out the best way to maximize your rental yield. Contact us for a free consultation!
3. Improve your rental’s front appearance
Never underestimate your property's curb appeal. It takes a potential tenant all of 20 seconds to make up their mind about the property and you would certainly want to impress them in the precious few seconds when they lay their eyes on it for the first time.
Pressure wash off some of the dirt caked on the front walls if the property is old. Consider painting the front walls and door to make them look new and appealing. A little effort can go a long way in making a great first impression and earning your property the higher rent it deserves.
4. Rent your property fully furnished
5. Improve the interiors
Even getting a fresh paint job or new and funky wallpapers can make a huge difference. Swap out old lighting fixtures with modern, stylish ones to change the vibe. Replace worn-out carpets with cost-effective and peel-and-stick flooring wherever needed.
6. Upgrade kitchen and bathroom fittings
So, it might be worth it to spend a few extra bucks on refurbishing and maintaining the kitchen and bathrooms in your rental. Fix any leaky faucets or problematic plumbing from time to time, and replace fittings if they’re worn-out. Even if such efforts cost some money, you can be sure that they’ll pay back with more optimized rents.
7. Avoid vacant periods
However, when the inevitable vacancy does come up, do your best to reduce the turnaround time. Start advertising your property as soon as your tenant notifies you. It might also be a wise decision to hire a property manager or a real estate agent to find an appropriate tenant quickly so you can avoid losses from long voids.