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8 Sources Of Income From A Property Other Than Rental
If you think that the revenue that a rental property can generate is solely from rental, you are wrong.
While the main income will probably be from rental collection barring any extraordinary circumstances, there are many creative ways to set up other income generators to boost the bottom line.
In fact, a lot of landlords find this brain storming process to conceptualizing methods to reel in more cash flow to be the most fun part of real estating.
You might ask… why dedicate resources away from the main income that is rental?
Well the answer is that the rental is more or less a given. And you shouldn’t need any reminding that your job as a business person is to maximize profits to feed your hungry bank accounts.
In some cases, side income can work out to as much as 50% of rental. That is not spare change to be oblivious to. Especially when you have a whole portfolio of rental properties giving you a full-time income.
Here are some of the other source of income that can be generated from your property on top of rental.
A lot of landlords, especially rookies, tend to leave housekeeping requirements vague… if any at all.
Tenants tend to be too lazy to make housekeeping a priority. And you cannot blame them for doing so.
They could just be renting for the short term. So why break all that sweat to maintain a house that don’t belong to them… and which they will be leaving behind soon.
The funny thing is that people usually prefer a home that is spick and span rather than a mess. It’s just that tenants are simply too lazy to put in that effort to clean and tidy up the place.
And for the majority of the time, they would be willing to pay a fee to have housekeeping chores taken care of by a third party.
If you already have housekeepers on hand that can handle the job, tenants will very often gladly pay the extra for a cleaner healthier home.
If not, consider hiring and charge a markup to tenants.
And if you are managing multifamily buildings, not offering housekeeping services is just leaving money on the table.
While wise-guys sometimes attempt to insist laundry is part of housekeeping, most people would be able to differentiate between the two.
Even in a 5-star hotel, the cleaners who arrive for room service don’t do the laundry. It’s a separate service altogether.
Laundry, like washing the dishes, is something that has to be done in a home. There’s no escaping from it unless you walk around naked at home and works from home 24 hours a day.
Even then, you might have bedsheets and pillow cases to wash.
However, unlike housekeeping that most tenants would be willing to pay for, many people are simply not comfortable enough to have their undies handled by a stranger.
So do offer laundry services. But don’t push it like a hard sell.
Houses typically come with garages for parking.
But apartments and flats don’t necessarily come with parking lots reserved by default for residents.
Even if you have experienced living in a condominium, you’d know that parking spaces are not exactly free.
Residents usually need to fork out a deposit for a lot. And additional lots might be charged a fee on top of an additional deposit.
If a tenant drives, he will need a parking space for sure.
If you have control over the parking space, there is no reason you should deter yourself from charging a nominal fee. Especially when there is more than one vehicle in the household.
However, do be careful with how you structure your fees when there are tenants sharing the apartment as housemates.
Wireless internet connection is not an essential item in a house. You are not obligated to provide date access unlike the roof.
Yet as you probably know, people cannot live without WiFi these days. Some might spend money on mobile broadband. But they come with slower connection speeds and data limits.
This makes WiFi an essential part of the modern lifestyle… yet unessential on paper.
This should be an easy sell.
5) Cable TV
Most tenants don’t really care about cable TV unless they are on the lease for the long run.
With media streaming services easily found online these days and things like Netflix or IPTV, traditional cable TV is losing it’s gloss.
However, there is still a segment of tenants who need cable for their binge watching sessions and sports.
There’s no point incurring these expenses on your end. At the very least, you must get tenants who request them to pay for the subscription charges.
Some houses come with utility bills packed into the rental. Some settle them separately.
Some landlords are completely transparent and let tenants settle the bill themselves. While others charge a flat fee on a monthly basis.
Depending on how comfortable you are with the settlement of utility bills, you might be able to squeeze some profits out of it.
But just bear in mind that if you allow tenants to just pay for utility used, don’t allow them to settle the payment themselves. Collect the money and make the payments on your end so that you retain a certain level of control.
This will help you avoid undesirable situations where tenants did not settle the bills due to “forgetfulness”.
In worse circumstances, they might disappear leaving you with a load of utility bills to settle yourself.
The home telephone is dying a slow death. When was the last time you made a call or answered one with a land line at home?
But despite this, it is almost a given that every house would have one.
The better part is that tenants know that they cannot expect to make free calls from the land line.
This is either a hit or miss.
Either tenants would find that WiFi is good enough for all their communications, or that they will find the land line essential for their chit-chat and gossip sessions.
If goes without saying that you should include terms and clauses into the tenancy agreement on various types of penalty fees.
On one hand, it helps to deter tenants from breaking the house rules or delaying payment on their rent.
On the other hand, it will allow you to charge them for making your life difficult.
And on the other other hand, it give you some negotiating leverage when you are trying to get tenants to agree with something. You can simply offer to waive certain penalties fees should they agree to something you want.
Finally, don’t feel ashamed for trying to squeeze out every dollar out of your rental property. Adding value is what business operators do.
And if there are more than one tenant in a house, they would usually be totally fine with splitting the extra costs just to make their stay a little more pleasurable.