Creative Way to Increase Your Cash Flow
Most Popular Reply
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
10yI would consult with the tenant and ask some questions;
- How long do you intend to stay with us?
- What services would you like to see in your unit; new paint, carpet, washer dryer, cable, security, new doors, windows, out side lights, alarm
- Let them know you want to improve the apartments
- Negotiate with the tenants, agree on a rent increase to cover the up-grades
- As a bonus, agree not to increase their rent for another 2 years
- A gift of a fat turkeys for the holidays
- An end of year bonus for paying on time
- A gift certificate for something they may like
I consider a tenant a customer, take good care of them and you'll find you will get your rent as agreed.
Remember "late charges" increases your net also.
Be kind and understanding when tenants don't pay on time, listen to their excuses or problems, you may be able to help them.
Tenants are just like us, we all have problems at times, a little leverage, understanding and kindness goes a long way.......they won't forget you.
When we have tenants with financial problems I consul with them, we talk about how to earn extra money (that is usually what the problem is...lack of money).
I suggest different ways they can earn money without a job; if your tenant is handy; painting, plumbing, roofing, fixing cars, teaching a course, bookkeeping. I suggest they pass out flyers promoting their services.
I had a tenant that was able to fix broken windows, I helped him with a flyer, told him to get a nice workmanlike uniform to look professional. He was surprised at how many cracked or broken window there were in the neighborhood. He did well, now when he needs some money he finds work by walking around the neighborhood.
Most all tenant can do something to earn extra money. I suggest they try to earn an extra $50.00 a day doing something. I think if they can earn $50.00 a day, they'd be able earn a $100 a day. (people will pay for these small services if approached right)
I use to give my troubled tenants a book, it was call 500 Ways to Make Money Without a Job. Look it it up.
Maybe there is something the tenant can do for you to cover some of the back rent; painting, removing trash, cutting grass, pushing snow, showing apartments for you, landscaping....etc.
Tenants who help you pay your mortgage are a great asset.....work with them.
Charles
42 Replies
- Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes10y
Dishwashers are a pain in the $%^&. If my units did not already have them installed, I would never provide one. I'm not sure why you're looking for creative ways to increase the rent. If the market supports it, you shouldn't have issues with minor annual increases.
-Christopher
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
I can imagine the more appliances you have in the unit, obviously the more work it will be. However, if you can create an extra $50-$75/month in rent, you're telling me you wouldn't want that? At 4 units, $50 increase to make your tenants happier and draw a higher class tenant, creating another $200/month, $2400/year, you'd have to be a crazy person to not want that if you can come up with creative ways to do it.
- Cary, NC · Member since 2015 · 99 posts · 38 votes10y
Kudos to the creative ways to increase rent! Go for it. But... I wouldn't advertise "free parking" if they are paying for in in their lease. It is more like an "Amenity Upgrade."
If your units do not have W/D, consider converting a closet or other area. Another option is to have a laundry room with coin machines. Vending machines can be profitable as well. Pet deposits and rental fees can add up. Another option is to offer a furnished apartment. Might find a few tenants willing to pay for that.
- Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes10y
I would consult with the tenant and ask some questions;
- How long do you intend to stay with us?
- What services would you like to see in your unit; new paint, carpet, washer dryer, cable, security, new doors, windows, out side lights, alarm
- Let them know you want to improve the apartments
- Negotiate with the tenants, agree on a rent increase to cover the up-grades
- As a bonus, agree not to increase their rent for another 2 years
- A gift of a fat turkeys for the holidays
- An end of year bonus for paying on time
- A gift certificate for something they may like
I consider a tenant a customer, take good care of them and you'll find you will get your rent as agreed.
Remember "late charges" increases your net also.
Be kind and understanding when tenants don't pay on time, listen to their excuses or problems, you may be able to help them.
Tenants are just like us, we all have problems at times, a little leverage, understanding and kindness goes a long way.......they won't forget you.
When we have tenants with financial problems I consul with them, we talk about how to earn extra money (that is usually what the problem is...lack of money).
I suggest different ways they can earn money without a job; if your tenant is handy; painting, plumbing, roofing, fixing cars, teaching a course, bookkeeping. I suggest they pass out flyers promoting their services.
I had a tenant that was able to fix broken windows, I helped him with a flyer, told him to get a nice workmanlike uniform to look professional. He was surprised at how many cracked or broken window there were in the neighborhood. He did well, now when he needs some money he finds work by walking around the neighborhood.
Most all tenant can do something to earn extra money. I suggest they try to earn an extra $50.00 a day doing something. I think if they can earn $50.00 a day, they'd be able earn a $100 a day. (people will pay for these small services if approached right)
I use to give my troubled tenants a book, it was call 500 Ways to Make Money Without a Job. Look it it up.
Maybe there is something the tenant can do for you to cover some of the back rent; painting, removing trash, cutting grass, pushing snow, showing apartments for you, landscaping....etc.
Tenants who help you pay your mortgage are a great asset.....work with them.
Charles
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @Account Closed:
I would consult with the tenant and ask some questions;
- How long do you intend to stay with us?
- What services would you like to see in your unit; new paint, carpet, washer dryer, cable, security, new doors, windows, out side lights, alarm
- Let them know you want to improve the apartments
- Negotiate with the tenants, agree on a rent increase to cover the up-grades
- As a bonus, agree not to increase their rent for another 2 years
- A gift of a fat turkeys for the holidays
- An end of year bonus for paying on time
- A gift certificate for something they may like
I consider a tenant a customer, take good care of them and you'll find you will get your rent as agreed.
Remember "late charges" increases your net also.
Be kind and understanding when tenants don't pay on time, listen to their excuses or problems, you may be able to help them.
Tenants are just like us, we all have problems at times, a little leverage, understanding and kindness goes a long way.......they won't forget you.
When we have tenants with financial problems I consul with them, we talk about how to earn extra money (that is usually what the problem is...lack of money).
I suggest different ways they can earn money without a job; if your tenant is handy; painting, plumbing, roofing, fixing cars, teaching a course, bookkeeping. I suggest they pass out flyers promoting their services.
I had a tenant that was able to fix broken windows, I helped him with a flyer, told him to get a nice workmanlike uniform to look professional. He was surprised at how many cracked or broken window there were in the neighborhood. He did well, now when he needs some money he finds work by walking around the neighborhood.
Most all tenant can do something to earn extra money. I suggest they try to earn an extra $50.00 a day doing something. I think if they can earn $50.00 a day, they'd be able earn a $100 a day. (people will pay for these small services if approached right)
I use to give my troubled tenants a book, it was call 500 Ways to Make Money Without a Job. Look it it up.
Maybe there is something the tenant can do for you to cover some of the back rent; painting, removing trash, cutting grass, pushing snow, showing apartments for you, landscaping....etc.
Tenants who help you pay your mortgage are a great asset.....work with them.
Charles
Thanks Charles! Great tips
- Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes10y
You are welcome.... those tips are a result of Trial and Terror and years in the field making mistakes, but not repeating them. This is a wonderful business once you get use to it and familiar with the many techniques of alternative financing.
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @Account Closed:
You are welcome.... those tips are a result of Trial and Terror and years in the field making mistakes, but not repeating them. This is a wonderful business once you get use to it and familiar with the many techniques of alternative financing.
Absolutely. For my first 4 rentals I will have the luxury of bringing low money down since I am planning to go owner occupied on my first four. However, after that, I'm going to either take money from my four properties that are cash flowing and use that as my source for down payments, or start getting serious about educating myself on alternate forms of financing. Have a good Christmas.
- Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes10y
One of my properties is close enough to a busy street. Yet not on that street. The long fence can be seen from the busy street. The fence is concrete. I am now talking with the city about selling signage. If I get the permits, I can increase my revenue by 12%.
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @Jeff Gates:
One of my properties is close enough to a busy street. Yet not on that street. The long fence can be seen from the busy street. The fence is concrete. I am now talking with the city about selling signage. If I get the permits, I can increase my revenue by 12%.
Jeff, this is a brilliant ingenious idea! What a great creative way to increase your cash flow.
Keep them coming!
- Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes10y
One of my homes has a big back yard all lawn. We have a water moratorium in California. This area has very hot weather and the tenants never use the back yard since it is too hot. When I went shopping for a date palm about two years ago they were $2000 each at 12 feet high. They grow about one foot per year. I found babies at Lowes for $17 each about 1 ½ feet tall. So I bought 24 and planted them in the rental homes back yard. In 12 years I will sell them for $2500 each.
- Real Estate Agent · Algonquin , IL · Member since 2015 · 53 posts · 28 votes10yAs a PM, I like the idea of a tenant doing the lawn work or fixing a sink, but the reality is the liability is not worth the risk. Have them earn money on doing odd jobs for folks but keep insured and licensed contractors working on your properties. On mis-step can cost you! I'm sure there are both insurance agents and attorneys here on BP that will be more than happy to share their horror stories with you. I like the signage idea though! I hope that works.
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @Jeff Gates:
One of my homes has a big back yard all lawn. We have a water moratorium in California. This area has very hot weather and the tenants never use the back yard since it is too hot. When I went shopping for a date palm about two years ago they were $2000 each at 12 feet high. They grow about one foot per year. I found babies at Lowes for $17 each about 1 ½ feet tall. So I bought 24 and planted them in the rental homes back yard. In 12 years I will sell them for $2500 each.
That is amazing! Great idea Jeff.
- Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes10y
I look for homes with a side yard for income. I bought one with a cement side yard 35ft by 60ft. It has a concrete fence facing the street. There is a small iron door to take out the garbage cans. The side yard is empty. So I went to Craigslist and spent about a half a year trying to buy a drive way gate. I found one 3 feet too short but still 48 inches high and 14 feet wide. I took it to a welder and he made me a nice 2 ½ foot extension on the bottom. So I bought two mammoth steel tube fence posts from Arizona. Now I tore down the concrete wall and installed the driveway gate professionally for $1300. I currently rent the side yard for an extra $100 a month for a RV storage.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes10y
Originally posted by @Christopher Brainard:
Dishwashers are a pain in the $%^&. If my units did not already have them installed, I would never provide one. I'm not sure why you're looking for creative ways to increase the rent. If the market supports it, you shouldn't have issues with minor annual increases.
-Christopher
Wow, dishwashers are about the most trouble-free appliances in my units. If you get simple control units there are almost no moving parts to break, and few ways for the tenant to break it ( unlike a washing machine). I put dw's in all units as it provides a better feel of luxury and adds to what I can change by probably $15-25 per month. Considering I buy all units second hand, even if I had to swap one per year I would be way ahead.
Skyline Properties - Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @JD Martin:
Originally posted by @Christopher Brainard:
Dishwashers are a pain in the $%^&. If my units did not already have them installed, I would never provide one. I'm not sure why you're looking for creative ways to increase the rent. If the market supports it, you shouldn't have issues with minor annual increases.
-Christopher
Wow, dishwashers are about the most trouble-free appliances in my units. If you get simple control units there are almost no moving parts to break, and few ways for the tenant to break it ( unlike a washing machine). I put dw's in all units as it provides a better feel of luxury and adds to what I can change by probably $15-25 per month. Considering I buy all units second hand, even if I had to swap one per year I would be way ahead.
Hey JD, that's exactly my thought as well, glad to hear it's working out well for you!
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Here is what I am thinking for my lease options. When I am ready to sign a new lease I will use present these options to new residents so they can pick an choose what they want, based off their desires. Still need to iron out the Rent prices, but this is the general concept of adding options in a lease to generate extra streams of cash:
What do you think @Ralph Hunter @Jeff Gates @JD Martin @Scott Schier @Account Closed ?
- Cary, NC · Member since 2015 · 99 posts · 38 votes10y
Be aware that though owner occupancy is a great way to get a lower interest rate and live "rent free." A lender on your second purchase is not going to let you owner occupy two properties. You will most likely need to refinance your first property in order to use that card again. That is if you do not stay their for the required 12 months.
- Cary, NC · Member since 2015 · 99 posts · 38 votes10y
@Max James I love the setup. Sounds like a great option. Though your laundry and housecleaning seems low. Even at 2x a month, you could probably end up paying a house keeper $50 a shot, adding $100 a month for the rent not including the laundry service.
As to furnished units. Well, I would first see if there is demand for such. Then you have two options. Keep you eyes open for nice used furniture and keep one unit worth in storage. I would set it up in a vacant unit and take high quality pictures to show perspective tenants.
Another option would be a rent-to-own company. You just tack on your share above and beyond the rental fee. Then after the 12 month lease, they have a buyout option.
- Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes10y
@Max James you're my type of guy.
Yes there are tons of ways to bring in side income. I spent five years rounding up ideas and was eventually able to pay my mortgage with ancillary income (without using my rents).
You're off to a great start. Let me suggest that you also offer payday rent options. Give your tenants the option to pay half their rent every other week (on their paydays). You'll end up with the equivalent of an extra rent payment at the end of 12 months.
Keep on innovating!
- San Diego, CA · Member since 2015 · 136 posts · 62 votes10y
Originally posted by @Max James:
Originally posted by @JD Martin:
Originally posted by @Christopher Brainard:
Dishwashers are a pain in the $%^&. If my units did not already have them installed, I would never provide one. I'm not sure why you're looking for creative ways to increase the rent. If the market supports it, you shouldn't have issues with minor annual increases.
-Christopher
Wow, dishwashers are about the most trouble-free appliances in my units. If you get simple control units there are almost no moving parts to break, and few ways for the tenant to break it ( unlike a washing machine). I put dw's in all units as it provides a better feel of luxury and adds to what I can change by probably $15-25 per month. Considering I buy all units second hand, even if I had to swap one per year I would be way ahead.
Hey JD, that's exactly my thought as well, glad to hear it's working out well for you!
====
My dad owned lower end apartments and hated dishwashers. He took them out most of the time. I don't run my rentals the way my dad ran his apartments.
I've got over 20 SFR rentals and I have found the most important thing to maximize net profit over the long term is to decrease turn over/vacancy. That is #1. I hear a lot of people, especially that own or manage a lot of units that say things like, "oh renters don't expect garages" "oh renters don't need dishwashers" "renters shouldn't expect to be able to have a dog". I think that is all horse s*&+.
Tenants and renters are people. So ask yourself what matters to you. How important is central air, a dishwasher, washer/dryer, a garage, being able to have a dog, granite counters, etc, etc? If the goal is to decrease vacancy then personally I give my tenants all the things I wouldn't live without: 2 full baths in homes over 3 bedrooms, heat & AC, dishwasher, washer/dryer, etc.
Some people say tenants don't care for your properties and that my strategy is a waist of money but personally I get mostly families with 2-3 kids and a dog and they stay for 5 years or more.
*If you have a section 8 strategy, ignore all of the above. I have section 8 units in areas with huge waiting lists for houses and you don't have to provide much to get the max voucher.
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10yAl Williamson absolutely !! I love this idea too due to the fact that this is something residents love. To a lot of landlords (myself included) we are always keeping our own points of view in mind and how we would approach a certain situation. In this case paying rent. For the majority of us, we wouldn't really think twice about taking an option where we want to pay more in the long run. However, everyone's situation is different and an option like this can drastically make life much easier in certain people. It's a huge honor they have the option of doing something like this, paying when they get paid. I have actually done this for a garage rental and the feedback was fantastic. My residents were so happy to see that I was for one, giving them options so that they can choose what they want to do and how they want to pay. Secondly, that it was a super convenient way for them to make payments since it landed on their pay day. I have to admit, I did not think of this idea on my own. I attended a seminar with "Mr. Landlord" where he came in and gave us a tid bit of what he does. This was one thing he suggested. He was a fantastic presenter and everyone in the audience thoroughly enjoyed what he had to say. Great point Al, thanks!
- Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes10y
@Max James Yep Jeffrey is inspirational! He made the payday rent idea famous. I'm a presenter at his upcoming retreat in February.
Like yourself, I collect ideas and develop some myself. I do so with the goal of making every rental I own more profitable before buying more roofs.
What I'm finding is that it's more profitable to put a $1 towards optimizing than it is towards another rental - especially when considering the inefficiencies like insurance and maintenance.
Anyway, best to you. Over the past 5 years, I've left some detailed BP posts on ancillary income and written a book as well. Hopefully you don't start from scratch as you advance.
- Investor · Cincinnati, OH · Member since 2015 · 229 posts · 50 votes10y
Originally posted by @James Paine:
Originally posted by @Max James:
Originally posted by @JD Martin:
Originally posted by @Christopher Brainard:
Dishwashers are a pain in the $%^&. If my units did not already have them installed, I would never provide one. I'm not sure why you're looking for creative ways to increase the rent. If the market supports it, you shouldn't have issues with minor annual increases.
-Christopher
Wow, dishwashers are about the most trouble-free appliances in my units. If you get simple control units there are almost no moving parts to break, and few ways for the tenant to break it ( unlike a washing machine). I put dw's in all units as it provides a better feel of luxury and adds to what I can change by probably $15-25 per month. Considering I buy all units second hand, even if I had to swap one per year I would be way ahead.
Hey JD, that's exactly my thought as well, glad to hear it's working out well for you!
====
My dad owned lower end apartments and hated dishwashers. He took them out most of the time. I don't run my rentals the way my dad ran his apartments.
I've got over 20 SFR rentals and I have found the most important thing to maximize net profit over the long term is to decrease turn over/vacancy. That is #1. I hear a lot of people, especially that own or manage a lot of units that say things like, "oh renters don't expect garages" "oh renters don't need dishwashers" "renters shouldn't expect to be able to have a dog". I think that is all horse s*&+.
Tenants and renters are people. So ask yourself what matters to you. How important is central air, a dishwasher, washer/dryer, a garage, being able to have a dog, granite counters, etc, etc? If the goal is to decrease vacancy then personally I give my tenants all the things I wouldn't live without: 2 full baths in homes over 3 bedrooms, heat & AC, dishwasher, washer/dryer, etc.
Some people say tenants don't care for your properties and that my strategy is a waist of money but personally I get mostly families with 2-3 kids and a dog and they stay for 5 years or more.
*If you have a section 8 strategy, ignore all of the above. I have section 8 units in areas with huge waiting lists for houses and you don't have to provide much to get the max voucher.
Great post. I completely agree with all of your points! The goal of every landlord should be to create a true home environment. Too many have the motif to make money. The reality is we are providing one of the most important resources for people and we need to treat others the way we want to be treated... Just like we learned in grade school... Too many people forget simple concepts like that I'm afraid.
- Cary, NC · Member since 2015 · 99 posts · 38 votes10y
I have to agree with these posts. Working to keep your existing tenants and reduce vacancy is going to be by far the best way to maximize your income. That means that we have to create a home environment for our tenants by offering amenities that they would want in their own home.
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