As an investor, owning and renting multifamily property can be a great way to diversify your portfolio and bring in passive income. Here are three tips to help you succeed.
Passive income is income that is earned without having to actively work at it. It doesn’t require a lot of your attention or time, yet it is still earned income. Focusing on investments that allow you to continue earning money with passive income can be a fantastic way to earn money now and in the future.
Once such type of investment is multifamily property. Though, your actual passive income will vary based on how much involvement you have in the property.
Looking to increase your passive income on your multifamily property? You need to make it more desirable. Let’s take a look at 3 tips to increase passive income on multifamily real estate.
1. Increase the Value of Your Multifamily Property
In order for you to make money on rental property, you need to have renters. And because there are often so many options on the market, showing there is great value in renting your property may entice the potential tenant to lean toward your rental.
It is important to mention that the more value you add, it is easier to keep your rentals priced closer to the higher end of the market range. Renters will be able to justify the extra money each month due to the great value and amenities they are receiving from the property.
So, how can you increase the value of your multifamily property?
— Add Storage Space
Storage space is something that many people are always looking for. Especially renters. Moving from one location to another – especially smaller apartments – means having stuff that doesn’t necessarily fit. Rather than get rid of it, millions of people throughout the country spend between $50.00 to $150.00 each month for storage.
Does your multifamily property have additional space to build storage? Storage facilities are incredibly cheap to build and can add a lot of value. Plus, not only can you entice renters with convenient on-site storage, but you can charge them a monthly fee for the storage as well. It could be a great investment. And a great way to increase your passive income.
— Add On-Site Laundry Facilities
Many, but not all, multi-family properties don’t come with a washer or dryer in the unit – or even a hookup. This means having to carry dirty laundry to the nearest laundromat. It can be seen as a great inconvenience. If possible, add an on-site laundry facility. The value of this investment is immediate and can add to your passive income, as well. Instead of your tenants going to other places in the community to do laundry, they can conveniently do it where they live and you can earn the money they paid to wash and dry. In addition, a lot of companies who lease the washer and dryers will give a signing incentive up to $14,000 when you lease their equipment!
— Be Pet Friendly
People love their animals – and they want to be able to take them wherever they move. For many, not allowing pets can be a deal-breaker. If you’d like to increase the value of your property and increase your ability to earn passive income, then deciding to be pet friendly means allowing your tenants to have pets. In addition, building a dog run on your multi family can help contain the pet mess while providing an extra amenity to your tenants. Remember — you can charge pet rent on top of the normal monthly rent.
-It’s a win-win for both parties.
2. Add Safety Features to Your Multifamily Property
People want to live somewhere safe. They want to know that when they are home or on the property that they are safe and secure. Taking steps to increase the safety of the property means adding additional value in it — and potential tenants will see it. In addition, you reduce the incidence of any vandalism and theft on the property so that your replacement, repair, and insurance costs remain low. All of this ties into your income – and leaves you with an increased passive income.
Here are a few ideas for increasing the safety features:
- Make sure you have adequate lighting throughout the property – and add more if necessary.
- Keep bushes trimmed to minimize hiding spaces for intruders.
- Consider adding security access points, whether through a gate, a door with a key code, etc. This will depend on the setup of your property.
- Avoid glass doors. These are easy to break — and costly to replace.
- Use top-notch locks on doors and windows to make accessing the property harder for criminals.
- Make use of security cameras on common areas of the property. Put up signs advising of such – and let your residents know, too.
3. Hire a Property Management Team
Hiring a property management team to handle your property for you is one of the best steps you can take in increasing your passive income. Why? Well, there is a lot that comes with managing a rental property. When you have a multifamily rental property, you are multiplying that work times the number of units you have. This can significantly increase the volume of your work. From finding new tenants, rent collection, repairs and maintenance, and so much more — you are actively involved in earning that income. Being a landlord is much like having a job. And with many units, it can be a very demanding job.
The idea with passive income is to earn money without having to put in the effort. This is where a multifamily property management companies come in. See, the property management team will put in the work to get the property rented, maintained, handle repairs, rent collection, all the marketing and paperwork — every aspect of the rental process. While you sit back and earn the income. That is what passive income is all about — and how a property manager can help.
Being a landlord can be a lot of work – and surely reduces the amount of passive income you receive. If you are ready to increase this income and be able to focus your attention on other investments rather than managing the day-to-day of your multifamily rental property, then you need to make your property more valuable, keep it safe, and hire a property manager.
And, since we are on the topic – you can’t just hire any property manager. Be sure that it is the best one in your area, such as Real Property Management Evolve in the Phoenix area. This breeds confidence and increased passive income.