Being a landlord can be lucrative. The potential passive monthly income generated from a rental property can enable you to increase your savings or pay off your mortgage. The potential increase in the property’s value over time can help you build wealth, as well.
You will, at some point, need to raise the rent for one or more reasons. It could be because, for instance, you want to keep up with rising local tax rates or you need to maximize your income.
That said, raising the rent on your tenant, no matter the reason, is never ideal. There is a possibility that your long-term tenant could choose to move out after their lease expires. And after they have left, you may find it difficult to fill the vacancy left.
On the brighter side, there are a number of other ways in which you may be able to increase your income without directly increasing rent. They are as follows:
1. Impose a Fee for Late Rent Payments
If you aren’t charging a late fee on overdue rent payments, then you’re leaving money on the table. Because no matter how good a tenant may be, there is always a chance that they could make late payments. And the reason for it could be as simple as just forgetting.
By having this late fee, you encourage tenants to make prompt monthly payments, but you also open up the possibility of generating more income. Remember, though, under landlord-tenant laws you cannot enforce something that isn’t listed in your lease. As such, include a clause regarding late rent fees if you haven’t already. State the dollar amount and when a payment is considered late, thus prompting a penalty fee.
In the state of Nevada, the most you can charge as a fee on late rent shouldn’t exceed 5% of the total cost of the rent. So, if the monthly rent is $1,500, the most you can charge as a late fee is $75.
2. Require Tenants with Pets to Pay a Fee
A majority of American households, over 70%, according to a recent survey by Pet Products Association, own a pet.
Now, renting to tenants with pets has its fair share of risks. Among these risks is property damage. A great way to mitigate against such an issue is by charging a pet deposit. And luckily for you, the state of Nevada allows landlords to charge a non-refundable pet deposit.
Anything between $200 and $500 is typical. Please note, however, that the Fair Housing Act (FHA) prohibits landlords from charging their tenants a pet deposit if they have a service animal as they are not considered pets.
3. Build a Relationship with Local Vendors and Contractors
Rental repairs are inevitable in any landlord’s career. Whether it’s landscaping, plumbing, or regular maintenance, there are repairs that will need to get done. And over time, these can turn out to be very costly.
One way of keeping maintenance costs in check is by maintaining and keeping a solid business relationship with local businesses. As a returning client, you’ll get to enjoy personal discounts and special rates.
Hiring knowledgeable property management services can also come in handy in keeping your maintenance bill low. A good company will have a vast network of vendors and contractors that can quickly resolve maintenance issues at affordable rates. What’s more, working with professionals will also ensure high standards of workmanship are maintained.
4. Offer Secondary Storage Spaces
Tenants appreciate more storage spaces. Therefore, if you can offer more storage areas, that can be an opportunity to make some extra money. The extra storage space can be in areas such as sheds, attics, garages, and basements.
Demand for more storage spaces is especially high in urban centers and in multifamily properties. If the tenant has larger items that they want to store, but not keep in their rental unit, you can charge them a storage fee to keep the items in the basement or shed.
5. Turn Your Property into a Vacation Rental
If your property is located in the right area, you may be able to make far much more money with a vacation rental than you would with a long-term residential rental property.
For instance, if you have a unit that’s normally rented out for $1,500 a month, you’d be able to ask for about $170 a night. This means that you’d only need about 9 nights to recoup the entire monthly rent. You will then have the rest of the month to earn additional profits.
6. Rent Out a Furnished Unit
Renting out a furnished property in Nevada can also be a great way to make extra money. It isn’t uncommon for a furnished apartment to rent for an extra 20-40% higher than an unfurnished one. This means you may be able to earn up to $600 more on a property that’s normally rented out for $1,500.
On the other hand, renting out a furnished property isn’t without its fair share of risks such as the increased risk of property damage and not providing a broad appeal to potential tenants.
7. Allow Subletting
Allowing tenants to sublet your property has its own fair share of advantages and disadvantages. Luckily, having a subletting policy can help take care of potential risks.
For starters, you can make it a requirement that a tenant looking to sublet their unit seek your permission first. This will ensure that only high-quality tenants get to live in your rental property, as they will all need to pass through the screening process.
You can also require that tenants looking to sublet their unit pay a sublet fee. On average, this is typically about $50.
There you have it, actionable steps you can take to increase your rental income without raising rent! If you still find them daunting, reach out to a property management company.
The team at Evolve Nevada can help! Call us today for all your property management needs.