Whether they’re looking to further invest in their growing real estate empire or simply trying to increase their take-home pay, property owners are always looking for ways to increase the profit they draw from their properties. The most obvious way to increase profit is to increase revenue, and a common way to increase revenue is to add new ways of generating it to your portfolio. Rent doesn’t have to be your only source of income, nor should it be. Landlords have plenty of options when it comes to opening up new lines of revenue, it’s just the simple matter of determining which will work best with your real estate business.
Below, we go into detail evaluating a number of different ways to add revenue streams to your business. We’ll help you evaluate if you’re a good fit for a possible revenue stream, offer guidance on how to get started, and provide some high level financial analysis. For convenience, here’s the list we’ll be going through:
#1 Offer Cleaning Services
Are you a good fit?
This additional revenue stream would work for most landlords, especially those managing large units and university housing. Few college kids clean regularly — if at all. Offering them cleaning services packaged into their lease could be a selling point for students and their parents.
Keep in mind — regular cleaning will help better maintain your properties. Ensuring that your units are in good shape will have a demonstrably positive effect on your long-term cap-ex charges. You might even be able to coach the cleaning service to focus their effort in a way that maximizes this benefit. For example, asking them to regularly clean the coils on refrigerators can significantly extend that appliance’s life.
Independent landlords managing smaller properties might experience more difficulty selling the services, but there is certainly a chance that tenants would be interested. Try talking to your tenants and feeling out whether or not cleaning services appeal to them. Even if only one or two units pay for the services, it is an opportunity for meaningful profit.
How to get started:
- Find a reputable cleaning service provider. Choosing the wrong provider could put the security of your tenants’ belongings at risk.
- Contract out the work. The particulars of the services will vary based on tenants’ needs. Some may require only monthly cleanings, whereas others might prefer weekly or bi-weekly services.
- Determine a price. Because more regular cleanings require less work, your service provider will likely charge less for weekly cleaning services than they will for monthly services. In this case, you might consider adjusting your additional fee based on how frequently the cleanings occur.
- Collect payments. You can include the tenant’s package in their lease agreement if you know the services they require upon signing, or you can write up an addendum after they’ve signed.
How offering cleaning services will increase your revenue:
What you will pay: $50-100 per cleaning.
What you can charge: $10-30 on top of the cost of each cleaning.
Revenue Summary: Tenants will pay $60-130 per cleaning; you will profit $10-30 per unit per month.
#2 Rent Storage Space
Are you a good fit?
Any landlord that has extra space could maximize profit by renting it out. This requires little additional effort — you already own the space, after all — and has the potential to yield significant gains. Landlords can rent out garage space, sheds, unfinished basements, and uncovered parking spots. It’s all about utilizing the resources readily available to you.
It is important to keep in mind that renting out your excess space means additional liability. Issuing clear guidelines for usage of the space and keeping up to date on maintenance are both crucial. There is also a possibility that renting to non-tenants could lead to conflict between the storage space renters and pre-existing tenants. Again, setting guidelines would minimize the chance of conflict.
How to get started:
- Assess your unused space. Figure out how much storage space you have available and how it would be best used.
- Know the laws. Non-dwelling units are regulated by state laws concerning zoning, building, renting, and more. Staying up to code is your first priority.
- Lay out clear terms of use. Prepare a contract, require a security deposit, and ready a plan of action in case the renter fails to fulfill their end of the contract.
- Rent to non-tenants. The laws and regulations surrounding non-dwelling units differ greatly from landlord-tenant laws. Renting non-dwelling spaces to tenants can lead to many complications, which is why it’s best to avoid mixing these relationships.
- Collect rent. You can collect rent monthly via cash or check, or you can choose to collect online using a digital payment service.
How renting storage space will increase your revenue:
What you’ll pay: $0-200 depending on how much work is required to begin renting the space.
What you can charge: $35-200 per unit per month; see the breakdown below.
- Garage: $100-200
- Uncovered Parking Spot: $50-100
- Small Shed: $35-50
- Large Shed: $150-200
Revenue Summary: Renters will pay $35-200 per unit per month, which will go directly into your pocket.
#3 Offer Satellite TV
Are you a good fit?
Even though we’re seeing a rise in popularity of streaming services, many of your tenants likely still desire access to traditional TV programming. Offering satellite TV to your tenants can be a great option for an additional revenue stream because it has a minimal entry barrier. Landlords managing 5 or more units can typically get package discounts for selling to tenants, but even landlords managing a single unit can take advantage of this revenue stream.
There are plenty of TV providers to choose from. Spectrum, AT&T, Comcast, Dish, and Verizon are all available options. You might already have a provider that you prefer, but if not, we recommend shopping around, calling to ask about package discounts, and looking into prices before making a decision.
There is somewhat of a time commitment in offering satellite TV to your tenants. Deciding on a provider, setting up your account, installing the hardware, and providing assistance to tenants are all time requirements to keep in mind. Some landlords have also experienced issues due to tenants partaking in illegal activity online. Implementing a plan to counteract such behavior is crucial.
How to get started:
- Create a game plan. Will you offer TV and wifi as a bundle? Which provider will you use? How much will you charge tenants? These are all things to consider first.
- Call the provider. Once you have an initial plan, call the provider to get a price estimate and to create an account.
- Install the hardware. Many providers will do the hard work for you by installing the hardware themselves.
- Advertise the amenity. Offering TV and/or wifi will set you apart from your competitors. Make sure prospective tenants are aware of what you have to offer.
- Collect payments. You can charge tenants alongside their rent. Simply create an addendum to their lease or write it in before signing.
How offering satellite TV will increase your revenue:
What you’ll pay: $50-100 per unit per month.
What you can charge: $10-30 per unit per month; you can charge tenants a little more if you offer them a little more — think additional channels, wifi, and more.
Revenue Summary: Tenants will pay $60-130 per month; you will profit $10-30 per unit per month.
#4 Allow Tenants to Sublet with Airbnb
Are you a good fit?
An issue that more and more landlords are experiencing is tenants subletting their space through Airbnb without their knowledge or permission. This leads to tenants breaking subletting clauses, unvetted occupants in your unit that you cannot contact, and you losing out on potential profit.
Working with trusted tenants to sublet their units, or guest rooms within their units, solves these problems. This is a particularly attractive option for landlords located in areas that experience heavier traffic from visitors and tourists. Nevertheless, Airbnbs are located all over the country, and marketing your unit as such could fill an unmet need in your area.
The innkeeper model describes the relationship that you would have with your tenant if you chose to sublet with Airbnb. As the landlord you would handle the financial end of the process. This includes using the Airbnb interface, dividing the profit with your tenant, and anything else financially related. Your tenant, then, would act as the innkeeper. They would help renters with their bags, provide them with any necessary information, and take care of housekeeping responsibilities.
In this model, the tenant pays their rent normally, you receive payments from the Airbnb renter, and then you cut a check for your tenant anytime they host a renter. This ultimately keeps you in control of all of the important financial procedures.
Your biggest considerations will be the cost and time required to fully furnish the space, writing up a new lease that details the agreement with your tenant, and the additional risk of bad Airbnb renters.
How to get started:
- Select a trusted and willing tenant. Not everyone will want to rent out their unused space, and you shouldn’t trust just anyone to do it.
- Establish a formal agreement. Figure out all of the logistics and update their lease agreement accordingly.
- Furnish the space. If you don’t have the time required to shop and assemble, perhaps you could pass this responsibility off to your tenant — it is their unit, after all. Just be sure to give them guidelines and a price range to follow.
- List the space on Airbnb. You will need to determine a rate, take professional pictures of the space, and create a strong page to market the unit.
- Collect rent. As we’ve discussed, renters will pay you through the Airbnb interface, and you will cut a check for your tenant.
- Clean the space. As the innkeeper, the responsibility of cleaning will fall to your tenant.
How allowing tenant to sublet with Airbnb will increase your revenue:
What you’ll pay: $1,500-4,000 per room.
What you can charge: $50-150 per night.
Revenue Summary: Even if you only rent out 15 days each month, your incoming revenue will be $750-2,250 per unit per month.
#5 Offer Corporate Housing
Are you a good fit?
For those who are unfamiliar, corporate housing is essentially where landlords rent out fully furnished apartments or homes to businesses. The businesses then use the space to house traveling workers who are gone for typically 20 or more days at a time. Generally, all utilities are included in the bill. It works much like an all-inclusive hotel, just without the housekeeping.
Anyone from construction workers to high-level executives require corporate housing, and units are needed all over. No matter your location, the size of your real estate business, or the luxury of your units, there is definitely an opportunity for corporate housing to work for you.
The biggest drawback to consider is the cost and time required to fully furnish an apartment or house. Corporate housing might also mean more maintenance/upkeep. If you’re housing blue collar workers who don’t work in an office setting, your unit will experience dirtier foot traffic, and your laundry machines will be put to greater use.
How to get started:
- Assess the local market. If you get a lot of execs visiting your area, but not construction workers, more luxurious units would be a better offer.
- Furnish the space. Make sure the furniture is fitting for the renters/businesses you’re hoping to market to.
- Determine a price. The goal of corporate housing is to offer a better deal than hotels. Landlords usually offer prices that are half the price of hotels. So if hotels in your area charge $100 per person each night, your goal is to charge $50.
- Market the unit. This can be done through your website, social media, travel agencies, and more. Be sure to have quality photos and descriptions of the space.
- Clean the unit. You want to ensure that each new renter walks into a unit that is at its peak quality.
How offering corporate housing will increase your revenue:
What you’ll pay: $3,000-10,000 per apartment.
What you can charge: $50-150 per person per night.
Revenue Summary: If you only rent 20 days out of each month (which is typically the minimum for corporate housing), your incoming revenue will be $1,000-3,000 per unit per month.
#6 Monetize Spare Land
Are you a good fit?
Monetizing spare land applies mostly to landlords in rural areas, but there could also be opportunities for landlords in metropolitan areas if they have adequate land. It’s all about figuring out what makes sense for your unused land.
Possible uses for the land include livestock, fruit trees, shade trees, beekeeping, local gardens, and more. When choosing how best to use your land, you should consider what the available space allows, related laws, how it will affect your current tenants, and what would offer the best profit.
How to get started:
- Assess your land. Determine what would work well in the space and what wouldn’t. You might even be able to grow produce or monetize the land in a way that doesn’t require you to rent it out to someone else.
- Advertise the available land. Find someone that would benefit from renting your land if necessary — long term rentals are ideal.
- Determine a price. This will vary based on how much land your renting out and how the land will be used.
- Create a formal agreement. Just like renting out units to tenants, you will want to ensure that the terms of the agreement are finalized and legally binding.
- Maintain the land. In between rentals, it is important to keep the land looking nice and ready to go for its next use.
How monetizing spare land will increase your revenue:
What you’ll pay: $0-500 depending on how much work is required to begin renting out the land.
What you can charge: $50-400 per month; large swaths of land will rent for more.
Revenue Summary: Although there may be somewhat of an up-front cost, $50-400 will go directly into your pocket each month. The more land you rent out, the more you can make.
#7 Lease A Billboard
Are you a good fit?
Most landlords should consider leasing a billboard as a potential revenue stream. While there are zoning laws to consider, you likely already have the space to sell advertisement space to local businesses, events, and non-profit organizations. Your fencing, siding, roof (especially if near an airport), tree line, grassy front yard, and porch railings all offer you the ability to rent out ad space.
Although billboards are a low time commitment for landlords, the zoning laws can be tricky to work around. Laws dictate where billboards can be placed, how big they can be, how long they’re allowed to stay up, and the types of organizations that can advertise. It might also be difficult to find long-term leases, which can be a headache and result in loss of revenue.
How to get started:
- Read zoning laws in your area. Zoning laws vary greatly from place to place.
- Assess your space. Figure out where advertisements would work best and how big they can be.
- Hang your own advertisement. Hanging an “Advertise Here” sign with your phone number is a great way to reach potential renters. You could also contact local non-profits to get started.
- Create a formal agreement. Renters should sign a contract that formalizes all of the logistics such as price, duration of contract, and size of advertisement.
- Collect rent. Providing the option to pay via cash, check, or digital payment services will encourage renters to advertise with you.
How renting storage space will increase your revenue:
What you’ll pay: $50-5,000; you may only have to pay for marketing, or you might decide to erect your own billboard.
What you can charge: $100-4,000 per ad per month; smaller advertisements will rent for less than actual billboards. Your location will also affect how much you can charge.
Revenue Summary: Depending on what you have to work with, you might experience a hefty up-front cost, but your potential revenue of $100-4,000 per ad per month deposits right into your bank account.
#8 Lease A Cellphone Tower
Are you a good fit?
Not all landlords will have the space required to lease a cellphone tower on their property, nor do all landlords live somewhere in which service providers are looking to build new towers. But if both of these facts are true for you, leasing a cellphone tower on your property could lead to a considerable profit.
Zoning laws surrounding cellphone towers can be intense and difficult to meet. Service providers also have strict requirements, and they might ask you to jump through hoops. Again, while this might sound like a headache, the promise of a long-term, well-paying contract might be too sweet to pass up.
How to get started:
- Do your research. Are any service providers even looking to put in a tower near you? If not, save yourself the time of looking too far into the topic.
- Assess your land. Cellphone towers require anywhere from 500-5,000 square feet of land.
- Read up on zoning laws. The laws will be different in every city.
- Know your worth. If everything works out and you’re able to begin the process of leasing a tower, don’t go into price negotiations without knowing the average price. You wouldn’t want to lose potentially hundreds of thousands of dollars just because you didn’t do your research.
- Sign the contract. The standard contract to lease a tower is 25 years.
How leasing a cellphone tower will increase your revenue:
What you’ll pay: $175,000
What you can charge: $1,300-2,500 per month.
Revenue Summary: You have the potential to profit $215,000-575,000. You’ll pay the up-front cost of $175,000 for building the tower, but your monthly rent over the typical 25 year contract period will earn you $390,000-750,000.
#9 Add Coin-Operated Laundry
Are you a good fit?
No tenant wants to go to a laundromat, and many pass up on units based on the sole fact that they don’t offer laundry units. Don’t miss out on prospective tenants or an additional revenue stream; install coin-operated laundry machines.
Coin-op laundry does particularly well in multifamily buildings, but any landlord could capitalize on this opportunity. It comes with a minimal time commitment and requires only the initial investment. You might have to put money into repairs overtime, but hopefully long after you’ve turned a profit.
How to get started:
- Purchase coin-operated washer and dryer units. Shop around to find a good deal. You might be able to get a discount if you buy multiple units at once.
- Place the units. Laundry units should go in a common area, preferably in a centralized location.
- Add a change machine. Providing tenants with the ability to get change in the same place they do their laundry will encourage them to use your equipment.
- Collect your money.
How adding coin-operated laundry will increase your revenue:
What you’ll pay: $700-1,000 per laundry unit.
What you can charge: $1-2 per washing/drying.
Revenue Summary: Up-front, you will spend anywhere from $1,400-10,000 based on how many washers and dryers you purchase. On average, landlords make $75-200 per month.
#10 Put In Vending Machines
Are you a good fit?
Putting in vending machines could be a great additional revenue stream for landlords managing properties with 4 or more units, especially those with families. Kids love spending money on junk food and soda, and it could result in a significant profit for you.
There are a few different options when it comes to adding vending machines to your property. You can go through a company that gives you the machine for a low price, fills it, and does the up-keep. Or you could choose to buy the machine and the products to fill it yourself. It’s all about how much time you’re willing to put in and how much you’re hoping to make.
How to get started:
- Assess the demand. Do your tenants want vending machines? Would they use them? Would they attract prospective tenants? All of this depends on the kind of machines you put in, the types of tenants you have, and who you hope to attract.
- Buy the vending machines. As we’ve just discussed, you have a few options when it comes to buying the machines. Consider all of the variables and go with the best buying option for you.
- Put in the vending machines. Typically, the best place for the machines will be a common area that is centrally located. Placing them inside your facility will help eliminate unwanted outside traffic.
- Collect your money.
How putting in vending machines will increase your revenue:
What you’ll pay: $1,000-5,000
What you can charge: $1-3 per item.
Revenue Summary: How much you make each month will depend on, the number of machines you put in, the number of tenants you have, and how much they buy. Landlords can make anywhere from $100 to $2,000 monthly.
#11 Rent U-Hauls & Trailers
Are you a good fit?
Renting out U-Hauls from your real estate business is a great opportunity for additional revenue. There is no franchise fee, they typically offer 21% percent commission, and it will attract potential tenants to your business. All you have to do to become a U-Haul dealer is call to set up.
The only major drawback to becoming a U-Haul dealer is the time commitment. Dealers are expected to check in customers, refuel vehicles after they’ve been returned, and wash the trucks and trailers as needed.
How to get started:
- Visit the U-Haul website. They have a lot of additional information available, and you can fill out your information online to become a dealer.
- Apply to become a dealer. If you don’t apply online, be sure to apply after speaking with a representative.
- Complete their training. U-Haul requires that new dealers take their training course.
- Receive the equipment. U-Haul usually delivers the trucks and trailers to you.
- Get listed on the U-Haul website. The great part about dealing U-Hauls is that you get listed on their site, which brings customers to you.
How renting U-Hauls will increase your revenue:
What you’ll pay: $25-250 per month for refueling.
What you can charge: $10-50 per piece of equipment + $0.50-0.75 per mile.
Revenue Summary: You have the potential to make $100-500 per month depending on the demand in your area and the amount of equipment you have to rent out.
Conclusion
Some of these revenue streams will be a good fit for you, others won’t work with your properties or business, but hopefully there’s one or more strategies above you can easily implement to start increasing your revenue today.
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I’m going to look more into corporate apartments and see if that is an option for my unit once business travel opens up again. It seems to have a huge profit margin.