There are many ways to boost the income of an investment property but some can be costly. This post covers three ways to boost revenue without substantial investment. These cost-effective strategies are designed to not only enhance revenue streams but also improve tenant satisfaction. We include realistic examples to illustrate potential ROI and practical implementations.
1. Pet Fees and Added Services
The demand for pet-friendly accommodations continues to rise. Introducing a monthly pet rent or specific pet-related amenities can open new income streams. For example, at a 60-unit property where 25% of tenants own pets, implementing a $25 monthly pet fee could generate an additional $375 monthly or $4,500 annually. Additionally, varying charges based on pet type (cat or dog) and non-refundable pet deposits can further increase revenue and cover maintenance costs such as carpet cleaning post-move-out.
Key Benefits:
No cost to implement
High demand in pet-friendly markets.
Increases tenant satisfaction and retention.
Implementation Tips:
Include pet rent clauses in new lease agreements.
Add amenities such as pet waste stations or washing areas to attract and retain pet-owning tenants.
2. Utility Billing with RUBS (Ratio Utility Billing System)
Implementing a Ratio Utility Billing System (RUBS) is a great way to reduce expenses by allocating utility costs to tenants based on usage and square footage of the units. To make billing as fair as possible, new technology allows you to submeter tenants' water usage with products like SimpleSUB Water. RUBS allows you to pass on a significant portion of utility expenses to tenants, thereby lowering operating costs and directly raising your income. For example, a property spending $60,000 annually on utilities could adopt RUBS and transfer 80% of these costs to tenants, saving up to $48,000 annually.
Key Benefits:
Substantial reduction in operational costs.
Promotes responsible energy and water use.
Fair and transparent cost distribution.
Implementation Tips:
Ensure the billing system complies with local utility regulations.
Educate tenants on RUBS to promote transparency and acceptance.
3. Technology Upgrades: Wi-Fi Packages
Offering bulk rate Wi-Fi packages by partnering with an internet provider can provide tenants with better service while generating additional income for the property. Many tenants value reliable and fast internet access, making this a highly appealing amenity. It also makes the move-in process easier because they don’t need to set it up themselves. This strategy requires minimal upfront investment and is a simple way to enhance tenant satisfaction and increase revenue. For example, a 100-unit property charging $20 per month for bulk Wi-Fi can generate $2,000 per month or $24,000 annually.
Key Benefits:
Low initial investment.
High tenant appeal.
Competitive edge in the market.
Implementation Tips:
Partner with a reputable internet service provider to offer bulk rates.
Market the upgraded Wi-Fi service as a value-added amenity to current and prospective tenants.
By implementing these straightforward, low-cost strategies, property owners and managers can significantly enhance the profitability of multifamily properties. These methods not only align with modern housing trends but also cater to the evolving needs of tenants, ensuring competitive advantage and increased profitability.
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