15 Proven Ways To Earn Higher Rental Income in India

On Nov 16, 2021

There is a direct relationship between the appearance of a property and its ability to generate rental income. Furthermore, there is a clear link between a property’s presentation and the tenants it attracts.

Landlords can significantly increase the amount they can charge for their property by making appropriate improvements. Of course, there is a fine line between improvements that can increase rental income and those that simply leave you over-capitalized, so you should exercise caution before making any large purchases or extensive renovations. Increasing the rental income of your investment property is a top priority for savvy property investors, and it’s not as difficult or expensive as you might think.

Tips to increase your rental income

Increase the rent

If you charge higher rent, you will make more money. Simple! No, not at all. You should investigate the rent in your area and determine how much less rent you are charging in comparison to comparable properties.
If an increase is justified, avoid doing so during the holidays or on a special occasion for your tenants, such as a birthday or anniversary. That kind of thoughtfulness makes tenants feel appreciated, and as a result, they are more likely to resign their lease.

Add amenities and give your property an upgrade

Home improvements that increase the resale value of your rental property are an excellent way to justify a rent increase. Some improvements can also help with rental property turnover. Carpet, for example, is difficult to clean in between vacancies, so replacing it saves you time and makes your space look nicer.

Don’t wait until your tenant moves out to upgrade an appliance because if you install it while your current tenant is still living there, they’ll get to enjoy it, giving them even more reason to renew their lease. The same is true for large, one-time replacements, such as purchasing a new HVAC unit.

Finally, some upgrades can protect you from unexpected liabilities. For example, if a landlord is aware of crimes committed on or near the property but fails to take the necessary precautions, the landlord may be held liable for future crimes. Installing a security system and keyless entry are just two of the extra features that will protect your property and tenants while increasing its value.

Keyless entry, such as code boxes or smart locks, facilitates rental property turnover because all you have to do when you get a new tenant is change the code. You’ll also never have to worry about misplaced keys. However, if you are investing through real estate platforms such as Assetmonk, then you need not worry about the upgrades and maintenance works as they take care of the same.

Create an additional revenue source

If you own an apartment complex, you can have coin-operated laundry or vending machines, but additional storage is a simple way to increase your income. This could be for bike storage, car storage, a shed, or even a wine cellar or wine refrigerator.

You could also consider a secondary dwelling unit (ADU). An ADU is a structure that is built on land that already has a main building. An ADU has its private entrance, kitchen, bathroom, and living space; everything a tenant could need. It’s a way to supplement your income by acting as a long-term rental or studio/office.

Decorate the room

By furnishing the space, you can earn up to $200 more per month. This may be ideal for short-term renters, divorcees, those new to the country or area, or anyone who simply does not want to purchase furniture.
Experiment with R.U.B.S.

R.U.B.S. is an abbreviation for ration utility billing systems. It’s a method of billing utilities that divides up 100% of all utilities used by your building amongst your tenants based on factors such as square footage. This reduces the amount a landlord contributes to the overall utilities of the building.

Smart pricing

Pricing is the most important factor that will either break or make your sale. So, to make your pricing more effective, add some finesse to it. First and foremost, try to set price expectations early on so that potential tenants are not caught off guard and you do not waste time on false leads. Another simple psychological trick you could use is to set the price of your rental just below the hundreds of dollars. At first glance, Rs 25,494 appears to be more appealing than Rs 25,500. Also, keep in mind that it is better to price high than low because you can always lower your quote but rarely raise it.

Reduce your rental’s operating costs

Making improvements to your home that increase its value while lowering your expenses is a good idea. Better windows, as well as more insulation, can help to reduce heating costs. You can also save money by installing a new HVAC system. Instead of lawn care, consider alternatives such as parking, more storage, a tennis court, or an ADU.

Reduce vacancy

Finding a long-term tenant may be the most clichéd way to increase your rental income, but it is still the most efficient way to increase your rent. Offering a price incentive based on duration is the most effective way to focus on long-term tenants. However, if the unavoidable situation of a vacancy arises, your best bet would be to reduce the turnaround time. You can accomplish this by ensuring that you begin advertising your property as soon as you are notified by your tenants. Statistically, leaving your property empty for about a month costs you approximately 8.3 percent of your annual rental income.

Experiment with the BRRRR method (or scale your portfolio another way)

BRRR is an acronym that stands for buy, rehab, rent, refinances, and repeats, and it is a popular investment strategy. You buy a property for less than market value, fix it up, rent it, refinance (possibly with a cash-out refinance to get more money), and then buy another property and repeat the process.
One of the advantages of BRRRR, or any strategy for scaling your portfolio, is the ability to leverage having many properties during negotiations to get better deals on labor and materials.

Refinance your house

When it comes to refinancing, you can get better terms and, as a result, make smaller interest payments over time, which will increase your cash flow.

Take advantage of Tax Breaks

Renovating your property before putting it on the market for rent is no easy task, but it is an important step in increasing your rental income. Simple because it allows you to charge a higher rent. Nonetheless, it exacts a heavy toll in terms of time, effort, and, of course, money. As a result, make sure to take advantage of tax breaks to reduce your overall spending. Claim all repairs and maintenance costs on your property, and don’t forget to include the cost of hiring a contractor and, if applicable, business-related travel.

All cash rental purchases and snowballing

Two of the six most common real estate investment strategies are snowballing and all-cash rentals. They are, in fact, very similar. Snowballing is the process of pooling all of your income to pay off your rental properties’ debts one at a time.

All cash rental purchases entail putting all of your money together to buy a rental property outright, with no debts. The result is the same: your rental income is higher because you are paying less interest. You can also scale your portfolio more efficiently if you have more equity in your homes.

Invest in Class C or D properties

You could invest in Class C or Class D properties to increase your cash-on-cash return (CCR), which is a measure of how much money your money makes you. Because these properties are less desirable, they are less expensive.
They may be older, require extensive repairs, are less likely to appreciate, have a higher tenant turnover rate, and have other disadvantages. However, because they are less expensive, Class C or Class D properties can generate higher CCR.

And if you happen to find a neighborhood in a revitalized area, you may have a fantastic opportunity on your hands!

Keep the law in mind and be prepared

Finally, don’t just concentrate on raising your rent. Make sure to keep vacancies and overall risk to a minimum, maximize re-signings, maintain your property, and avoid doing anything that could land you in legal trouble!
You can accomplish this in a variety of ways, including:

Thoroughly screen potential tenants
Create a positive relationship to keep the best tenants
Practice fire safety
Seasonal maintenance should be performed
Avoid common lease violations
Be ready to face early terminations
Recognize evictions
Invest in states that are friendly to landlords

Promote the vision

Real estate, like any other product, relies on persuading your target audience. To make your property look brighter and more cheerful, give it a thorough dusting and open the blinds. If the unit appears to be too empty, try staging it with furniture. You can also up the ante by getting creative with a blank wall and injecting some personality into the décor. When prospective tenant walks around the property, they should be able to picture themselves living there. That is when you can be confident that you have closed the deal.

You should approach the management side of your buy-and-hold business as a profit-making business in and of itself, rather than just “what you have to do to own properties.” The higher your rents, the lower your costs, and the higher your retention rate, the better your bottom line will be. Bad investments can be saved by good management, but good investments can be killed by bad management. Increase your rental returns by being proactive.