Rising Expenses for Landlords! How To Keep Ahead

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It is no secret that expenses have increased substantially in the recent past. In the last five years, the Seattle region has seen general apartment expenses rise nearly 25%.  With expenses steadily increasing, it is imperative for owners to make sure the income their property produces follows suit. 

In the past five years, we have seen steady increases in rent, however, not all buildings and owners have taken advantage of these increases — specifically properties that are self-managed and have long-term tenancy. These properties are at risk of falling behind in their income/expense ratio. Rental increases are common and even expected by tenants in today’s market. As an owner, if you are not issuing yearly rental increases, you are falling behind. 

Implementing a utility bill-back system is becoming standard practice, with tenants typically expecting to pay for utilities in addition to their rent. One way, is RUBS. RUBS stands for Ration Utility Billing System, and uses an allocation formula that divides a property’s water bill among its residents based on a ratio of floor space, number of occupants, or some other quantitative measures. There are many third party companies who handle this type of system and even bill the tenants directly. Another option is a flat rate billed directly to the tenants in addition to their rent. 

Parking space is another income-producing feature that is often overlooked or taken for granted.  Buildings that have parking will be in high demand, and previously where parking was a bonus will now be a paid amenity. Charging for parking can bring in a substantial amount of additional yearly income, and is a great way to bring in extra income and help subsidize increasing expenses.

Now more than ever, it is worth your time to strategical decide the best ways to keep your income streams on an upward trend.