4 Steps to Reduce Your Rental Property Expenses by $100 per Month

by | BiggerPockets.com

In case you haven’t heard about the $100 Expense Reduction Challenge, let me bring you up to speed. In March 2013, I dared BiggerPockets Nation to reduce their rental property expenses by $100 per month. If anyone was successful, I’d send them a $20 Home Depot gift card.

Deborah B. crushed the challenge saving $261.78 per month by adjusting her rental insurance and now I get to join her in the winner’s circle!

A Journey to Finding $100 in Monthly Savings 

It’s a hodgepodge of methods, but here’s how I finally pieced my savings together:

$30 per month by asking tenants to voluntarily contribute $10 each month towards the complimentary Wi-Fi I was providing. Three tenants began adding $10 onto their rent payments. I plan to make a donation request once a year.

$22 per month by having Ambit Energy credit monthly referral bonuses. I referred 15 customers to Ambit’s less expensive natural gas service so now Ambit credits my natural gas bill each month. How cool is that?! My official results are pending, but I’ll post a copy of my bill once it comes in.

$50 per month by buying deeply discounted Home Depot store credits from people on Craigslist. Once I noticed I was spending over $150 each month at Home Depot, I decided to take advantage of the secondary market for gift cards and store credits. I have enough contacts now that I can consistently buy store credits at 30% + discounts and I maintain a reserve of discounted cards so I never run out.  Farwell Home Depot financing!

$70 per month by reducing my vacancy rate. Just because I’ve been a landlord since 1996 doesn’t mean I do everything well. One of my biggest mistakes was waiting for a tenant to move out before marketing their unit. Now I start marketing as soon as I get a 30-day move out notice. I conservatively predict that this practice (plus the waiting list I’m forming) will reduce my vacancy rate by at least 25% which saves $70 per month in lost rent.

That’s $172 worth of savings; definitely enough to win the $100 Expense Reduction Challenge.

How much can you save? It’s not easy but it is a worthy quest. A lot of my BiggerPockets mentors consider saving $100 to be equivalent to owning profitable rental unit. But since $100 worth of savings can be realized without investing any money, your return on investment can be off the charts!

Motivated yet?

Create Your Own Success Story 

Here’s a battle plan to get you started:

Step 1: Park Your Ego  

There is no way around it; a serious effort to cut cost involves self-confrontation. And that’s not fun! Egos have their place, but not when it comes to reducing expenses.  You can either save face or money, but you can’t do both at the same time.

  • Think of areas where you can be more diligent with your property management practices
  • Examine yourself for areas where you’ve been complacent

Step 2: Confront the Brutal Facts 

  • Make a bar graph of your annual expenses by vendor
  • Sort expenses from greatest to least
  • Repeat for multiple years. Five years of trends would be ideal
  • Look for trends. What’s been a reoccurring theme?
  • Look for “perfect storms” that have occurred more than once
  • Quantify the cost of your less than ideal management practices

Step 3: Challenge Every “Fixed” Expense (They Really Don’t Exist)

Just like a schoolyard bully, fixed expenses start to crumble once you fight back. Be irreverent – you get what you negotiate.

  • Ask if there’s a crazy way or a silly way to reduce this expense
  • Ask for contributions from everyone who benefits from an expenditure (even non-tenants)
  • Figure out how to get the same result in a different, less expensive way – there are many ways to the top of this mountain
  • Refuse to accept a vendor’s annual rate increase

Step 4: Be Courageous – Be Ruthless – Take Action

  • Try out your expense reducing ideas on a small scale and measure the results
  • Attempt to negotiate concessions on your top expenses.
  • Be bold! Ask for help. Ask for donations.
  • Be unreasonable and make the world adjust to you.

Get Into the Corridor

I love T. Harv Eker’s saying, “get into the corridor.” Get into the corridor and start moving toward your goal. Only then will you be able to see inside rooms that contain previously obscured opportunities.

It’s normal to be scared and dismiss this as a cute idea. After all, who wants to risk looking foolish or facing possible failure?

I understand those reactions. I’ve wrestled with them all year.  If it weren’t for public accountability, I might have given up.

You Can Do This! 

Wring out your full potential. The benefits can go far beyond real estate investing and possibly make you a more disciplined person.

I’ll look for you in the Expense Reduction winner’s circle, but until then, let me leave you with these words:

“Whether you think you can or think you can’t – you’re right.”  – Henry Ford

Photo: ericcommando89

About Author

Al Williamson

Al Williamson helps landlords increase their monthly income by sharing unique tips to save money. He is the author of Airbnb for Landlords, and he blogs at LeadingLandlord.com and is an active BP member.


  1. Great Mark… but don’t stop there! Combine your credit card rewards with the use of coupons. 5% and 10% off coupons are super easy to find – just Google for them.

    Turn your 2% cash back into 7% and 12% savings.

    Use the money you save to buy yourself lunch. Just don’t forget to toast your BP Brother.

  2. Al,

    I love the fact that you are just finding creative ways to reduce expenses as well as working the RE business. The question of “How?” gets us to start thinking differently rather than just giving up. Thanks for the post! We will look into the RCV to ACV.

    • Alright Joseph, mission accomplished if I get you to take action. There are a TON of unexplored opportunities inside our rental businesses – nano inventions with huge potential – we haven’t yet scratch the surface.

      Now, do me a favor, and give me an exclusive interview on your upcoming success story. There is a $100 worth of monthly savings in your business. Tell us where you find it.

  3. From personal experience, any time you call to “negotiate” a price, start by asking for the cancellations department. Those folks are authorized to bend over backward to help keep you on board! I did that today with an internet connection and they made my speed 6x faster, subtracted 25% of the cost, and gave me a free new modem and professional installation.

    I tried going through regular channels three days ago and all they could do was make it 4x faster, save me 4% of the cost, and they were going to have to charge me for both the modem and the installation (over $250).

    I think I’m going to “cancel” every year!

  4. Al, could you please share with us how you go about buying gift cards and store credits off Craigslist without getting scammed? I don’t see how you can confirm the card has any value prior to paying cash for it? Love the idea but it seems risky. How do you verify the validity before purchase? Thanks!

    • Sharon, you’re asking me to reveal my Super Ninja Trick.

      Well OK – the short answer is that you need to meet the seller at the store, buy merchandise with their card, and then pay them.

      You can find the details of how I do this on my blog or by Googling “How To Safely Buy Discounted Home Depot Gift Card Off Craigslist”

      I’m working on a way to buy cards without meeting the seller. Stay tuned.

      • Andrew Payne

        Very old thread here, but just to point out the maybe not so obvious fact that there’s a 99% chance you’re getting discounted Home Depot cards by helping to facilitate store theft. Organized criminal rings hire low-level thieves to steal merchandise and return for store credit. They essentially fleece these cards into cash by paying for well-meaning shoppers’ purchases and getting cash from them. In return, everyone else pays 5-10% more for everything in the store to cover what Home Depot calls “shrink”, or losses due to theft.
        You can choose to ignore this to boost NOI or accept that’s what’s going on and stop. There aren’t that many people out there that are gifted hundreds of dollars of Home Depot credit that never intend to shop at Home Depot.

    • Robert,
      Add 5% and 10% coupons as well. You can easily find these listed on eBay. Yes, you pay a little but you save a tremendous amount.

      Coupons reduce the price BEFORE sales tax, so they are powerful on multiple levels. I find that they pay for themselves via sales tax reduction. I LOVE that!!!!

      Another Ninja Trick – apply the coupon (that can’t be combined with other offers) and then pay with the discounted gift card. Snowball the savings – then take yourself to lunch!

  5. Thanks for the tip about the 2% Capital Rewards card that I applied for and was approved. For Home Depot , if you are a member of an organization (eg NARPM) you get 2% off any Home Depot purchase too including purchases made using Gift Cards and Coupons , both in stores and online.

  6. With my rentals I include utilities bc it works to my advantage and benifits the tenant. I get an annual printout (which I use for my taxes) and get an average of what the utilies cost per apt. I then add $20 for electric and $20 for the combined (, sewer,gas,trash,water ) per apt for wrightin the check/handling fee and tenants know what they are paying each month. They never use in excess like you might think.
    Here is the savings:
    1. I turn the utilities in on my taxes as an operating expense =return
    2.. My electric company mails out free enery saver bulbs to me for every account + mine 🙂
    3. If a new tenant moves in the dep. is same as rent (bc I incl utilities) then I get a bonus$$

    • Would you clarify for me:
      1 – If you’re reporting your tenant’s utility reimbursements then how is reporting utility expenses on taxes beneficial. I think it would be a wash.

      3 – Please expand on this. I don’t see the bonus yet.


  7. Great ideas Al.

    There is one I might add.

    Pay your current tenants for referring a new tenant for your vacant rentals (one that gets approved and actually moves in). This reduces your expenses by reducing the length of your vacancies. Offer a $100 Home Depot card as the referral fee. (One that you bought at a deep discount LOL). They can use this to improve YOUR property.

    Send out a simple newsletter to your tenant each month full of tips and this reminder. Try to get their email addresses or just mail them the newsletter with a statement of the rent due. You can just send simple tips like “don’t forget to clean your gutters in the fall”. This builds rapport with your tenants.

    You might also consider the amount of rent you want for the property, then raise it $10-15. Offer a discount for paying on time that equals the amount of this rent increase. If they don’t pay on time, they don’t get the discount. After your grace period then you get late fees too.

    Nice post.

    • Sharon,
      The $100 incentive is one of the main pillars in my vacancy reduction plan that I’m implementing. I’ll report back how well it works for me.

      I’m going to think more on the potential of newsletters to tenants. I haven’t considered those possibilities.

      Thanks for the other tips. I’ll add them to my list of income ideas

  8. You can also save your money on advertising whether you want to find an apartment or to lease it. Or invest in a shower-reduction kit to save your expences on water. Moreover watch free TV online! For what reason you are paying for cable channels if you don’t watch them all? Think about uunecessary profligate spending!

  9. I vaguely remember something from the NOLO Landlording book that the “offer a discount for paying rent on time” can be seen as an excessive penalty for paying late, & therefore not legal here in CA . No one is likely to complain, but you might want to double-check local laws. There are other nifty things you could do as incentives.
    For some reason gift cards make a bigger impact than just dollars off rent. I’ve used Walmart gift cards as thank-you’s for tenants & “sorry something broke & caused you problems”.

  10. Inspiring article Al.
    I am thinking of my places and more than a couple of things are coming to mind pretty easy.
    I guess that is good and bad.
    Good that I see the opportunity.
    Bad since if I didn’t have to think very hard there isn’t a good excuse to why I’m not already doing things.
    Well water under the bridge, time to embark on the journey of continuous improvement!

    • Shaun,

      You’re right about the emotional part of expense reduction.

      That’s why Step 1 is sooo important.

      Maintaing an egos, especially for us experienced landlords/PMs, can be costly.

      Congratulations on innovating and saving your family some money. You’re a Learner and that’s noble!

      • I’ll guess that ego costs people more money than any non-catastrophic type event than anything else.

        I HATE to be wrong but I find the best way to stay ahead of that is that when I AM wrong to admit it, accept it, fix it (If possible) and then move on.

  11. Stephen Dorroh

    Al I just listen to your podcast on bigger pockets and I wanted to reach out and tell you I enjoyed it. This is my first day reading about real estate and I my vision is to build a community. So I hope to continue to hear what you are doing to lead and build up community. I am a physics teacher so I really felt the statement about being a magnet.

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