Like many property managers, you may only associate increasing profit with increasing rent. At the same time, you might not be in a position to safely increase rent because you could risk losing tenants. After all, each month of vacancy can lose over eight percent of your potential revenue. You may be better off charging somewhat less and keeping your units occupied.
It’s true that many properties maintain high occupancy rates by offering a great value for the price. If you’re not in a position to increase rents, you can still consider some creative ways to improve your bottom line. Since these tactics don’t force your renters to pay higher rents, they are likely to keep your tenancy high while giving you a chance to make or save money.
Improve Your Bottom Line Without Increasing Rent
Try some of these strategies to help your property bring in more revenue or decrease costs:
- Charge for Extra Amenities – So-called luxury apartments might include attractive amenities. Of course, these properties charge a premium for additional luxuries that set them apart from basic rental homes. It’s possible that your current and potential renters might enjoy some of these additional features but don’t really want to pay for all of them. In this case, you might consider offering them as options that renters can buy for an extra charge. For instance, renters may be willing to pay for a laundromat, extra storage space, convenience items from vending machines, or even upgraded WiFi. You could also charge for access to a fitness room or well-equipped business center with shared workspaces and meeting room. Some of these attractive features don’t require a large investment, and you might make more money if you simply charge extra for them than if you add the charges into all rents.
- Reduce Property Costs – You may not need to increase your revenue if you can lower costs. If you manage one or more large complexes, you should make use of your negotiating power to find vendors who will offer you necessary services at competitive prices. You may have simply called upon the same providers for years without giving it a lot of extra thought so you may benefit from shopping around a bit. Some vendors that you may consider include pest control, cleaning services, maintenance, and any utilities that your company provides for common areas. Of course, it’s always a good idea to compare property insurance offers every year or so.
- Partner Up With Local Service Providers – Your renters may already take advantage of certain services that you can provide them. With your buying power, you may even be able to offer quality services at cheaper rates and still make a nice profit for yourself. For example, you might be able to negotiate a $50 per apartment rate for a weekly maid service, weekend car detailing, or semi-annual carpet cleaning. If you can turn around and charge your tenants $75, you could have an extra $25 in pure profit to enjoy.
In certain areas, many renters will be happy to use all sorts of concierge services, including dog walkers, laundry delivery, and more. If some renters don’t care to pay extra, they won’t have to use these services.
Don’t Know Which Options Will Work For You?
Of course, you won’t know if you can find service providers who will offer you cheaper rates until you shop around. On the other hand, you already know which of these services your property needs, so it’s just a matter of finding competitive providers. Most companies will be happy to offer you price quotes to try and gain your business.
Adding extra amenities and services for renters may be slightly riskier because you may not know which ones would be likely to attract the most renters. To remedy this, you might survey your current renters to find out what they’d be willing to pay for and what services don’t interest them that much. In any case, you can also advertise these extra features when you post available rental properties. Just make it clear that they aren’t included in the base rent.
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