Growth Potential of Rental Property Income

One of the benefits of receiving rental property income is that with a little time, effort, and ingenuity, you'll have the ability to grow that income and, at a minimum, keep pace with inflation. This may be unlike other types of investments, or typical 9-to-5 jobs, which can be quite frustrating and unrewarding for many diligent, hardworking employees trying to advance themselves.

The important point to remember about growing your rental property income is not to become greedy. If you've every watched the movie "Wall Street", it was actor Michael Douglas's famous philosophy and phrase "greed is good" that ultimately led to his downfall.

For a normal rental situation, it's never a good practice to charge a tenant more than market level rent. It's no secret, but long-term tenancies can be established by charging tenants fair rent and providing value and good service in return.

Some of the most common methods for increasing a rental property's income are as follows…

• Coin Operated Laundry Facilities - Depending on the number of units and tenants in your building, coin operated washer and dryer facilities can produce a significant amount of income. The downside is maintenance and repair of the units. However, some companies lease the units and maintain/repair them for a share of the revenue.
• Additional Parking / Garage Use - If additional parking is available on your property, you may be able to rent the space(s) to other neighboring tenants or property owners. The same holds true with any available garage bay units on your property.
• Locked Storage Facilities - Having additional locked storage facilities such as in a basement or garage can be a great, value-added amenity for tenants.
• Air Conditioner Fee - As a landlord, if you pay the electric service for an apartment unit, then an additional fee can be charged to a tenant who installs an air conditioning unit. The fee can be on a per unit basis during the months that they are installed. However, such a clause that describes the additional fee would have to be included in the tenant's lease.
• Apartment Unit Remodeling - The simple act of cleaning an apartment to make it more attractive, painting, replacing worn out carpets, etc. can go a long way towards increasing the rental income of the property. Also, doing some needed exterior painting and cleaning up the yard will improve the attractiveness of the property and make it easier to obtain higher rents.
• Time and Inflation - It seems that these days, the only thing that comes down is rain and snow, never the cost of living. I remember the first apartment I lived in right after college in 1982 - it was a nice two-bedroom unit for $270 per month in the suburbs. That just shows how powerful the affects of time and inflation are at raising rent levels.

By increasing the attractiveness of your rental property and providing some value-added amenities such as those mentioned above, your property would be more competitive, allowing higher rental income.

On the other side of the equation, if you can't "squeeze out" additional rental income, you'll have the ability to increase your cash flow by lowering your expenses. This may prove to be a better alternative if your rental property income is at or near market levels and the above methods are being used.

For more in-depth information about rental property income, please visit The Landlord's Library book collection. It's a terrific, one-stop source for practical, comprehensive information on the entire subject of residential landlording.

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Investing in Rental Property