Conventional/UnconventionalWays To Increase Rental Property ROI

[Travis Zuehls]

Hello,

As I am currently learning avidly as much as I can on Bigger Profits from the podcasts that interest me the most and from the best books I've found on youtube I noticed most people seem to care more about procuring as many properties as possible as quickly as they can. While that can be great I figure why not take a different approach. As I search for my first property within my county I am researching methods to increase the ROI with as little of an extra investment or none at all if possible. Now I can still search for new properties as I continue to maximize profits from this first property but I will not stop until I feel I have automated systems that can be replicated for future investments.

I.) Methods To Increase Revenue:

1.) Increase the number of units/rooms in the property. Many people are fine with just renting out the place to one person for a set price. I believe this significantly decreases the potential profits of the home. I have seen a 2,000 square foot home be turned into an 8 unit place as the garage was turned into 3 rooms and the mid level was turned into 3 rooms and up stairs stayed with 2 rooms. After speaking with a land lord who did this his cost of creating the rooms cost not even half of a months rent and now this land lord charges 550 per unit plus utilities. The original 3 bedroom 2 bathroom would've rented for around 1.2k/month if he would've just kept it as is and did a normal rent to a single family. Instead he created room shares and rented out to 8 people and now is making 4.4k because of the additional units. 

2.) FEES: Late fees, pet fees, damage fees, lease termination fees , other fees: This can be up to an additional $400 a month depending on how many renters you have and other factors. 

3.) Vending Machines: A method to "let your money work for you."  The small up front cost for the machine ($300-$1200) and the whole sale purchases of supplies (alibaba or other dropshippers) is peanuts compared to how much you can make from this thing long term. I would only put this into the homes where you have 6+ people. You can pay a kid $10 to fill it up for you. I would wait for 2-3 months before making the purchase so you can use the renters money to pay for the entire shipment and analyze their spending trends and see what items they enjoy the most and best prices that would out compete those places. convenience things like toilet paper, tooth paste, tooth brushes, laundry detergent, soap, bounce could be an option, and then you have snacks, cold drinks, phone chargers, etc. Anything that the type of tenants in your house routinely purchase that can fit into the machine could potentially be a good item if the price is right. This gives them an added benefit of convenience

4.) COIN OPERATE LAUNDRY MACHINES: These can purchased at a well under $1k in great working condition. Having 6-8 people that wash their clothes 2-4 times a month would provide an additional $50 or so.

5.) Parking Spaces: You can charge for an extra parking space and or covered parking spaces. I remember my first apartment complex offered this. I declined since my Car wasn't worth much but if you have working professionals with new shiny cars they wouldn't mind the extra $10-$20 a month or so.

6.) Rent out Transportation: cars, trucks, bikes, hell even a scooter. No matter what there will be a tenant or two at one point or another that will need the vehicle and if you have a spare bike/vehicle or can find a reasonable deal it might be worth it. Also, people are making an additional $500-$1500 for an average vehicle on Turo so it might be a wise investment. You would have to do your market research based on what cars do well in what cities but it should be a very lucrative investment and perhaps random strangers can pay off the vehicle for you within a year or so.

7.) Sublet/Weekly or daily options: You could test out short terms stays like a month, week or even a few days and could easily charge double or triple what your long term rates are (average daily cost). I would test different times of the year and perhaps only used the rooms that are fully furbished for this. See what seasons work best with what time periods.

8.) Billboard Posts: This greatly depends on location. If you're in a high traffic area and if the sign is far enough a way from the house then this could be an obvious passive income strategy for you. I've heard of people making anywhere from $2-$5k per month extra. You really have to check your zoning regs and contact the best companies.

9.) Lease out land to a cell phone tower. Not something I would personally do but they can range from as little as $8 a month to $150k a year. WOWZERS

10.) B2C arbitrage: hire convenience workers (weekly cleaners, landscapers, etc at discounted rates to take away the duties these individuals will be willing to collectively sacrifice a $10 bucks a month for. Again, select the right tenants for this

11.) Storage: If you have a Truck sized storage unit I'm sure somebody will have extra stuff to spend the extra $50 or so a month. These can be easily purchased for $300 or less depending on the size and material desired.

12.) Rent out the soil: You can have organic growers locally who would like the extra land to grow their crops on your soil to make some more extra income and maybe some tasty food as well. hmmmmm spinach (maybe Popeye said this once)

13.) Game Room: coin operated arcade games, pool table, ping pong table, etc:

14.) Rent out common supplies that tenants might potentially would need but just for a day or two: Gaming counsel with games, specific tools, gas if they're low or something, laptop, etc.

15.) Grants for a first time home owner, hiring college students for labor, and many other endless grant possibilities

16.) Leverage Credit Cards: If your credit card enables you to do cash advances and you have a high limit 10K plus with a high return of 3-5% or more then I would take those and pay off any of the loans, owner financing or rent to own monthly payments you must make and make an extra $100+ depending on how much the monthly payment is or how many properties you have. In some cases people can get even $1k+ depending if they have 10+ properties. The most I've ever received back in one month was $300.

17.) Rent out campers on Air B & B

18.) Built in 2-3% annual increase in rent to protect from inflation rates. I've heard of 2-3% per month but that would scare away many tenants.

 II.) Methods To Save that $$$$$$:

    1.) Tax deductions: Mileage, interest rates, utilities, Depreciation, etc. Claim your house as a non profit business for either recovering alcoholics, for seniors, or for college students

    2.) Property taxes: If you have the exemptions in your state then jump on that horse and ride it into the sunset. Disabled vets, senior citizens on low income.

3.) Be the Property Manager and the repair man: Basically you're the RENAISSANCE man and if this is your first home I would for do this for not only saving money but for the experience and skills to know who to hire in the future.

4.) Lease to own: If you set up the contract correctly and purchase a home below $100 k I believe this would cut out the property management, insurance, and property taxes if the contract includes this. I am not sure about this one but it would probably be a state by state situation.

5.) Go Green: Everyone is all about going green and becoming more efficient with solar panels and much more so it's time you jump on the band wagon.

6.) Utility Bill Back: 

7.) Minimize Turnover:

8.) Screen your tenants like you would with your daughter's new boy friend. You not only want you other tenants to be safe but you want your house to not be destroyed and your turnover rates to be 0 or as low as possible.

9.) PAY 0 down and have lowest possible interest rates or 0% if possible. VA loans, Grants, Other investors pay it for you while you make the deal, lease to own, etc.

10.) PURCHASE HOME AT DIRT CHEAP: If you can find a dirt cheap home in a great location that has little to no fixing up to do then you have hit a jack pot:

These are all strategies I will look into. There's some I know I can implement immediately and some that may take time and some that might be very difficult but I am ready and willing to test. In the end I find this to be an interesting method since I can potentially make more from one home than I would with 6 or more homes with normal renting out strategies because in that scenario I would need a property manager and and the renting alone would be making 4 times less than the roomshare/increase room method. It might take roughly the same amount of time but I think it's very possible depending on location and the type of tenants you have. 

What are you waiting for? Give these things a test run and see what works and what doesn't. You never know until you try but obviously do your research to see which strategies have the highest probability of working out.