Choosing to invest in a rental property is a great way to generate a regular income and build equity in a relatively safe and easy manner. There are many ways for real estate investors to see exceptional returns on their investment, especially with the right know-how and a careful eye. Monitoring your investment’s performance and making changes as you go is the best way to maintain profitability and achieve your financial goals.
Here are five simple ways to help you increase profits at your investment properties:
1. Increase The Rent
Raising the rent on your investment properties is an obvious way to increase profits. Rent increases keep your property priced within market value, help you stay on top of expenses and give you the means to reach profitable rates on your properties.
The trick to a successful rent increase is getting as little pushback from your tenants as possible. You want a rent increase to meet market demands but make the increase manageable on your tenants budget so you don’t out-price them, resulting in a vacancy. The easiest way to present approachable rent increases is to build regular rent increases into your lease agreement. By including a small annual rent increase into your lease agreements, your renters will be prepared for the raise in living expenses and budget accordingly. It’s much easier for a renter to budget a $50-per-month increase once a year than a $250 increase every five years.
2. Provide Additional Services
If you own a multifamily property, triplex or fourplex, you might have the option to increase profits through coin-operated laundry. If the property does not provide an in-unit washer and dryer, offering onsite laundry facilities can make your property more appealing and has the added bonus of giving you more income each month. Colleagues of mine have shared that adding two coin-operated washers and dryers can generate up to an extra $100-$250 per month.
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