Potential New Revenue Sources for Your Property Investment
by Joe Killinger
I was recently speaking with a few property management companies and landlords around the country about things they do to generate some additional revenue for their properties, some of these were surprising to me. Many will not only upgrade your property, but will also increase your revenue and property value.
Lease model units out on short-term rental (Airbnb or VRBO) – This can be difficult if you only have one model unit, but if you have multiple why not create some extra revenue by renting it out for a night or two.
Renters insurance program – There are companies that will approve your entire property for renter’s insurance and when one of your residents takes out a policy with that company you will receive a fee.
Accent walls – As an additional offering, you can offer your resident an accent wall. Have a few color choices for them to choose from and charge an extra $15-$30/month (some markets maybe more).
Unique appliance offering – There are laundry washer/dryer systems that are able to fit in the space where a dishwasher would typically fit. Many people don’t use their dishwasher so if you don’t already have in unit laundry, this could be a nice offering that you could offer for an additional fee.
Hard surface flooring – Many people like to have the option to have hard surface flooring instead of carpet, so have an upgrade option and fee for your resident. This will also pay off in the long run, as you will not need to clean or replace the carpet every time a resident moves out.
Charge for covered parking – If you don’t have covered parking look into building carports (probably not as expensive as you think) and rent them out for an additional monthly fee.
Create extra storage to rent – Storage is always a big one. If you can find space on your property and add additional storage for your residents they will probably jump at the chance to pay an extra fee.
Install energy conservation devices – Energy conservation devices may not immediately increase the gross income, but they will have a positive effect on your net income. Water Conservation devices on faucets and low-flush toilets will lower your water bill, typically one of the highest expenses in an apartment building. By installing LED lights in the common areas, you will also save on electricity. Although the savings on electricity are not as dramatic, what many landlords do not realize is that the savings they realize on not having to replace burnt out bulbs (LED lights typically last 5-10 times more than standard bulbs), save an owner tremendous amounts in both maintenance costs and materials.
When providing additional services and/or amenities for a fee, you should use the following formula to see whether it makes sense financially to offer it. Essentially, if you can pay for the initial installation within 18 to 24 months or less than you should consider adding the upgrade.