1. Set a Budget
Setting a budget and managing expenses is very important when trying to make a profit off of an income property. Budget for future capital improvements - heating systems, hot water tanks, the roof and other big ticket items.
2. Raise the Rents
Raising rents can have a huge impact on your property's value. A higher rent roll means increased annual income, which boosts the value of the property. As leases expire, ask a professional to price the units.
3. Give the Property a Makeover
Whether fully renovating the kitchens and bathrooms or simply adding a fresh coat of paint, sprucing up your property will help increase demand from tenants. Higher demand means higher rents
4. Change the Property's Use
The way a property is currently used may not be the most valuable use for the property. As an example, in the Boston area, the residential market is incredibly strong. Converting a commercial/industrial building may allow you to substantially increase the property's rent roll. Check what local zoning allows.
5. Upgrade Fixtures and Appliances
Replacing old light fixtures and swapping old appliances with modern ones can be great selling points. Adding washers and dryers to the building are also a plus and can be an additional source of revenue if they are coin-operated.
6. Lower your Taxes
If your property includes retail or office space, your commercial tenants should be paying their fair share of real estate taxes. Additionally, and while it is uncommon right now in the Boston market, if you buy a property for less than the tax assessed value, file for a tax abatement.
7. Separate Utilities
Depending on the system, a building's heating expenses can be one of the largest expenses for a landlord. If they are not already, consider ways to separate out utilities so that tenants pay those costs directly.
8. Renegotiate the Leases
Renegotiating a lease gives the landlord the opportunity to raise rents and pass through expenses, but also to encourage improvements to the property. In commercial leases, for instance, the landlord may give free rent and construction allowances so that the tenant can make improvements to the space, including redoing the façade of the building, updating signage, replacing carpet and repainting. The tenant should pay a higher rent in return for those concessions, and your property will be improved - it is a win-win.
9. Hire a Professional Property Manager
A professional property manager can provide a number of valuable services to landlords, including handling maintenance issues and emergencies promptly, responding to tenant issues, negotiating better pricing from vendors and contractors and paying bills in a timely manner.
10. Divide the Building
In very general terms, the smaller the unit, the higher the rent on a dollar per square foot basis. Reconfiguring the property to increase the number of units can translate into a higher rent roll. Check local zoning.
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