As a landlord, you want to maximize the income you earn from your rental property. The most basic way to do that is by increasing rent prices in accordance with what the market demands while still keeping tenants happy and renewing their lease agreements year after year.
Maximizing rental income is about more than simply raising the rent. It’s about increasing the value that you provide to your residents.
Here are some proven rent increase strategies that will help you earn more on your investment property and drive up your consistent and recurring rental revenues.
Make Improvements and Upgrades that Increase Value
If you’re interested in increasing the amount of rent you earn on your property, there are a few smart and simple improvements that can increase the rental value of your property. When you’re deciding what to upgrade and update, make sure you’re choosing projects that are cost-effective and likely to attract well-qualified tenants. You don’t want to invest too much money and not earn all of it back.
Here are some of the things tenants are willing to pay more for when they rent your home:
Landscaping Improvements Equal Curb Appeal
Make sure the grass at your property is mowed, the leaves are blown away, and the trees are trimmed. Your landscaping will be the first impression a potential tenant has of the home, so give yourself a great chance at making a positive first impression. Attractive, welcoming properties earn more and rent faster.
Fresh Paint and Updated Floors
Fresh paint makes a huge difference in the look and feel of a home. The place feels newer and fresher, and there aren’t any visible scuffs on the walls. New paint also makes a room feel bigger. When you use bright white or light off-white paint, there’s a positive psychological effect that can benefit you when tenants are viewing the property.
Don’t forget the floors. Pulling up the carpet and installing a new carpet is one great way to improve your property, but what about avoiding carpet altogether? Hard surface floors are a great investment. They look better, and they’re easier to maintain. Earn higher rents with some upgraded floors.
Energy Efficient Appliances
Most rental properties include a refrigerator, an oven, and a stove. What about in-unit laundry? If you’re not already providing a washer and a dryer, consider making this upgrade. Tenants will be willing to pay a lot more every month for the privilege of doing their laundry from the comfort of their own home.
While we’re on the topic of appliances, invest in good ones. You don’t need the latest stainless brands for your rental, but you do want new, matching, and energy-efficient appliances. This is what tenants are looking for in a home. They’ll pay more when they notice the nice appliances in your listing and during the showing.
It seems like such a simple thing, but lighting makes a big difference. Install new light bulbs, and take a close look at the exterior lighting. Does the front door have a light that can be switched on before the tenants open the door? Good lights make your rental home look brighter and more inviting. Lighting also moves up the rental value of your property.
Allow Pets to Earn More Income
Pet-friendly properties statistically earn more money for their owners and have lower vacancy periods. You’ll also have an easier time retaining tenants when you allow animals. This is good news for maximizing your rental income.
A majority of renters have at least one pet. If you decide you’re not going to allow pets, you’re eliminating a large section of the tenant pool.
In addition to avoiding long vacancy periods, you can also collect more income when you have tenants who move in with pets. Charge a pet fee, which can be $200 or $300 per pet. When you have someone moving in with two cats, that’s a few hundred extra dollars.
Pet rent can also drive up what you earn in rental income. Some pet rent is as much as $50 per pet. This extra rent should apply to all animals; the type of pet does not matter. Typically, people move in with a dog or a cat. The pet rent should apply to each pet.
A good pet policy will protect your investment property and tell tenants what you expect in terms of behavior, maintenance, and cleanliness. Establish limits and guidelines in your pet policy as well. Maybe you want to have a maximum of one pet per property. Or, you can allow two pets; one dog and one cat or two dogs. These are reasonable restrictions and they still allow you to earn more on your property.
We recommend allowing pets in your rental home to attract more tenants, earn more income, and likely retain the residents who don’t want to go searching for another pet-friendly rental home at the end of the lease term.
Offer Conveniences and Charge for Them
Preferred parking. Online rental payments. Flexibility on paint colors. All of these things are conveniences that may attract good tenants to your property. They’re also not required. So, you can charge for them when tenants are willing to pay. The ease and flexibility of online rental payments will always be worth a $5 fee to most tenants. If you’re renting out units in a multi-family building, you’ll likely have tenants who are willing to pay extra for a reserved parking space.
Maybe tenants want to paint the walls in a different palette. Your lease agreement may prohibit modifications to the property, but if tenants are willing to pay $150 or $200 for their own paint color, why not consider it?
Look for ways to earn more by providing tenants with the amenities and details that they really want.
Retain Tenants for Higher and More Consistent Rents
Tenant retention should be an important part of any strategy that’s focused on maximizing income and bringing in higher rents. When you can keep good tenants in place, you earn more money.
Many Hampton Roads rental property owners understand the financial drain that a vacancy imposes. Vacancy is a huge disruption to your cash flow, but even more expensive is turnover. When one tenant moves out, you need to pay for maintenance, cleaning, and marketing before a new tenant moves in. Often, those upgrades we’ve been talking about need to be made. You have to pay for utilities and landscaping and security.
Retaining tenants means more rent, especially when you can raise the rental amount as the new lease is signed. Here’s how to make sure you keep your tenants and your consistent income.
Provide a positive rental experience for tenants
The best thing you can do to keep good tenants is to provide a pleasant and stress-free rental experience. You can do this in a number of ways:
- Explain the lease carefully before they move in. Understanding expectations is a great way to begin a good relationship.
- Communicate openly and transparently. Be available to your tenants, and responsive. Listen when they need to be heard.
- Check in once in a while. Tenants shouldn’t hear from you only when something’s wrong, like rent is late or the water needs to be shut off for repairs.
- Provide thoughtful cards and gifts on birthdays and holidays.
Share resources tenants may find helpful, such as local school information or new restaurant openings in the area.
Maintain your rental property
An important part of retaining tenants is being responsive when it comes to maintenance. When you respond quickly to maintenance needs, tenants feel like you’re taking their needs seriously and that you care about their comfort and happiness. One of the main reasons that tenants leave rental properties is because repairs were not taken care of in a timely manner. Don’t lose tenants this way; make the repairs quickly. Not only does it retain tenants, it also protects the condition of your investment.
Keep those rental increases strategic
Raising the rent is what we’re talking about in this blog.
It’s important, and most tenants will expect a slight increase. There’s nothing bad about raising your rent when a tenant renews the lease. Just keep the amount reasonable and market-driven.
When you have great tenants in place who pay rent on time every month and cause little trouble, you want to retain those tenants. These are the residents you’re hoping to renew year after year, so implement a small increase that matches inflation and the market rental values. You don’t want to be at the high end of what similar properties are renting for.
We can help you earn more on your investment property. Our strategies will help you bring in more rent and improve the value of your property year after year. Please contact us at Doud Realty Services, Inc. We provide expert property management in Norfolk, Portsmouth, Hampton Roads, as well as surrounding areas such as Virginia Beach, Suffolk, Chesapeake, and Newport News.