10 Ways To Make More Money From Rental Properties (2024)

Estimated reading time: 11 minutes

Understanding how to make money from rental properties is your key to building wealth and funding the lifestyle of your dreams. And today’s owners are finding clever ways to maximize their profit from rental property.

We have five brilliant ideas to help you make the most of your rental properties. Whether you’re a new investor with a single rental home or a seasoned investor with an entire portfolio of rental properties, you can take advantage of these five tips to increase your rental income.

10 Ways To Make More Money From Rental Properties

1. Rent Out Fully Furnished Apartments and Rooms

A specific segment of the rental market is looking for fully furnished units. Vacation rentals are among the most common furnished apartments. You can charge a premium for these real estate rentals, not only for offering furnished spaces, but also for the comparatively short duration of the stay.

But vacationers certainly aren’t the only demographic looking for furnished spaces. Some professions, like travel nurses and auditors, relocate every few months depending on where they’re needed. These “corporate apartments” are an excellent way to increase income from rental properties because you can contract with a single company to host all of their traveling professionals. And because these tenants are typically work-focused, they’re usually easier on the furniture than vacationers who might be more carefree and are more likely to host parties in the apartment.

Furnished rentals are also in high demand in markets that are experiencing large population growth from relocation. In Texas and Florida, for example, which are seeing an influx of new residents coming from other states, many renters are looking for “crash pads” (often in the form of student accommodation) where they can land for a few months while they look for a more permanent living arrangement. Rather than making two complete moves, it’s easier for them to store their possessions, move into a furnished apartment, then get their possessions out of storage once they’re ready to move into their new longer-term home. We recommend looking into property selling prices across Florida and Texas so you can find a great space in either region.

2. Offer Additional Storage Space

There’s no such thing as enough storage space. We always accumulate as much stuff as we can store, and then we keep getting new stuff! Renters come in with their holiday decorations, bikes, and seasonal clothes, all of which require storage space.

So storage space will always be in demand. Property owners can capitalize on this universal need by offering additional storage space. Unused basem*nts, sheds, attics, crawlspaces, and common area closets can all be converted into usable storage space for your renters. You can turn these spaces into another way to profit from rental property! Include the space with your rental unit to increase the monthly rate for that unit, or offer storage space rentals separately to give your tenants the option.

3. Minimize Resident Turnover

Finding new renters costs you time and money. Between advertising the unit for rent, showing the space to prospective tenants, running credit checks, getting the unit in proper physical condition for your new renters, and any vacancy loss, high turnover can send your operating expenses through the roof!

In addition to all the time and expense, new renters bring uncertainty. Will they pay rent on time? Will they take care of the unit and be courteous to the neighbors? You don’t want to have to replace good, reliable renters.

Luckily, there are a few things you can do to minimize turnover and increase your rental income:

• Provide exceptional customer service.This means being responsive to your renters, addressing maintenance requests promptly, and following up to make sure your renters are happy with the home.
• Show appreciation.A $10 coffee shop gift card is an inexpensive way to surprise and delight your renters.
• Build a sense of community.The hardest part of moving is leaving your friends, right? So if your renters make friends with other residents in the building, they’re less likely to move.

4. Offer Additional Services and Amenities

Today’s clever property owners are figuring out how to make money from rental properties through services. Let’s face it; we’re all busy. Common chores and errands like laundry, housecleaning, and getting groceries present unwelcome interruptions and sometimes get neglected. Some renters, especially professionals in high-income areas, are happy to pay someone else to handle these tasks. You can increase your rental property income and boost resident satisfaction by offering these services.

Amenities also present an opportunity to increase your rental rates, particularly in apartment communities. Depending on your capital improvement budget, you could add a fitness center, community garden, or dog park on-site to add value to your units. As with additional services, these amenities increase your rental income potential while simultaneously increasing resident satisfaction.

In some cases, you can charge direct fees for these services. Take pets, for example. Some property owners refuse to rent to people with pets. This means that pet owners are willing to pay more to have their pets accepted in the lease. In most states, property owners are legally allowed to charge monthly pet rent in addition to the base rent. And if you’re worried about potential pet damage, rest assured, most states allow you to collect a pet deposit on top of the security deposit for additional risk mitigation.

To protect all your rentals at once, you should consider an umbrella insurance for all your properties.

5. Reinvest Your Rental Income Into More Rental Properties

To maximize your profit from rental property, increase your property portfolio. Once you learn how to make money from rental properties through your first rental, you can repeat the process with additional properties to increase your monthly cash flow and your net worth.

The rental income from your initial investment property is the perfect source of funding for your future real estate investments. By reinvesting your rental income, you’ll be able to build your portfolio faster and larger, creating a virtuous cycle of growing investments and increasing returns.

On the other hand, you could fill out a home equity line of credit or HELOC application to gain access to more of your equity which you can then use to reinvest into your rental property. You may even be able to use those funds to purchase more properties.

6. Implement Dynamic Pricing Strategies

Just like hotels and airlines adjust prices based on demand, consider dynamic pricing for your rentals. Use market data to set competitive prices during peak seasons and adjust for lower demand periods. This strategy can maximize your income by ensuring you get the best possible rent based on current market conditions.

7. Optimize for Energy Efficiency

Investing in energy-efficient appliances, solar panels, and better insulation can reduce utility costs significantly. Not only does this attract environmentally conscious tenants, but it also allows you to potentially charge a premium for these features. Additionally, energy-efficient properties often qualify for tax credits and rebates, further improving your ROI.

8. Explore Short-Term Rental Options

If your property is in a high-demand area, especially near tourist attractions or business centers, consider short-term rentals through platforms like Airbnb or VRBO. Short-term rentals can often command higher daily rates compared to long-term leases, though they do require more active management.

9. Leverage Property Technology (PropTech)

Utilize the latest property technologies for efficient management, such as automated rent collection, smart locks, and property management software. These technologies not only save time and reduce management costs but also enhance the tenant experience, making your property more attractive.

10. Optimize Rentals for Work-from-Home Tenants

As a property owner, tapping into the work-from-home trend presents a unique opportunity to cater to a growing demographic of professionals who prioritize a dedicated workspace in their living arrangements. By optimizing your rental units for remote work, you create an attractive proposition for potential renters who are seeking a living space that doubles as an efficient and comfortable office.

To achieve this, designate an area within the rental unit that can serve as a home office. This space should ideally be quiet, well-lit, and separate from the main living areas to minimize distractions. Ensuring there are plenty of power outlets and high-speed internet access is crucial, as these are non-negotiable for remote workers. Additionally, consider enhancing the workspace with built-in desks or shelves, which can add significant appeal and functionality.

Advertising your property as “work-from-home friendly” can not only justify a higher rent but also attract a demographic of responsible and career-focused tenants. This strategic move not only meets a pressing need but sets your property apart, potentially reducing vacancy rates and increasing your rental income. With the remote work trend showing no signs of slowing down, this adaptation may become an increasingly valuable asset in your real estate portfolio.

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