When purchasing investment property to hold and lease, certainly one of your key goals is typically to maximize your rental income – and when doing so, there are usually two primary ways to increase your bottom line over time. One is to increase the rental income to your tenants. The other is to decrease your outgoing expenses. Both of these will essentially put more money in your pocket.
There are some landlords, though, who have a difficult time increasing the rent on their properties. They may feel that their tenants will be upset and that by increasing the amount, it could even cause their tenants to move away. In some cases, property owners feel that they would rather have good paying tenants in their property than have no tenants at all in an empty unit.
But the truth is that oftentimes, rent increases are not only non-upsetting to tenants – unless it is an extremely large increase – but in many instances, an increase is even expected. In fact, raising the rent by a mere $25 per month on an annual basis is not usually enough of an increase to force a tenant to move away from the property. However, a $25 per month increase equates to an income increase to you of $300 per year – and, if you own multiple units, this could become quite a nice increase in your overall income.
The other way of maximizing your income is by decreasing your expenses. While this may not initially seem as exciting as a rise in income, it can still equate to the same – or more – in terms of an increase in bottom line.
As an example, if you have been covering the cost of cable television in your rental units, you are likely paying out somewhere between $40 and $50 per month. If you decide to have the tenants pay for their own cable TV going forward, that monthly decrease in costs can turn into a bottom line increase for you of between $480 and $600 per unit.
There are many ways to maximize your rental income – and you don’t have to lose good tenants in the process. For more information, give us a call. We can help you to increase your property’s bottom line, while at the same time making the most of your time as an investment property owner.