With the average rent of a three-bedroom home in Phoenix coming in at $1,319 per month, there are many ways to improve your return-on-investment (ROI).
Here are 10 ways you can keep more money in your wallet while maximizing revenue from your rental property. This includes tips for making passive income, charging more rent, and money-saving actions.
1. Re-evaluate Your Rental Application Fees
Application fees are used to deter renters who might not be serious about your property. It is meant to cover the cost of background and credit checks, and can increase rental revenue in the long run by identifying likely high-quality tenants. Running these reports can bring up red flags of renters who might be a risk for your Phoenix rental property. Since you can view credit reports, employer checks, and past landlord checks, it can allow you to weed out otherwise undesirable applicants. In Arizona, landlords are allowed to charge a rental application fee with no cap.2. Offer a Furnished Rental Property
With the rise of millennial renters, a furnished rental property is one of the most sought-after amenities. It’s useful for those who might be trying out a new city for a year or two to see how it fits their lifestyle. Residents view it as a cost-effective solution for a rental property since they won’t need to buy furniture or pay a moving company. There are several affordable sources for furniture, including Ikea and even Amazon. You don’t necessarily have to invest in Pottery Barn or other high-end furniture selections. However, consider the price point of your property rental. Renters who are spending well above the average rent price will likely expect nicer furniture. For a long-term rental, you can get up to 20% more monthly rent for furnished vs. unfurnished properties. If you are renting for the short-term, you may get up to 50%. You may also justifiably charge a higher security deposit if the rental is furnished.3. Use In-Unit or Community Coin-Operated Laundry
On-site laundry is another way to maximize revenue for a Phoenix rental property. There are two options to consider: coin-operated community laundry or a washer and dryer inside the unit. If you choose a community laundry room, it can serve as a passive income for you and convenience to tenants. The earnings from the machines can cover upkeep and maintenance costs as well. With an in-unit option, this provides another opportunity to charge higher rent prices. Furthermore, since it can help satisfy tenants, they may agree to sign longer leases which keeps your property filled longer.4. Allow Pets on Your Property
Allowing pets on your property can help widen your potential tenant pool and increase your monthly rent cost. Some landlords charge an additional $25 per pet on the premises, which can add up to $300 in one year for just one pet.
5. Scrub and Shine
Cleaning is an easy and low-cost option to help maximize your property value. How so? Everyone expects to rent a fresh and clean home, but a thorough deep clean could really help your property sparkle and stand out from other rentals in the area. Luckily, cleaning your rental home is as easy as gathering supplies and spending a few hours using elbow grease. You can get the job done with items that you probably already have on hand. Collect a pile of old rags, a bucket, a brush with a handle, and a cleaning solution. You can even make your own cleaning solution with some DIY efforts. This is a list of 10 DIY cleaning solutions, from pet stain removers to oven cleaners, by Martha Stewart. If your home has carpet, it’s important to keep this clean as well. You can rent a steam cleaner to clean the carpet yourself or hire a pro.6. Consider Home Tech
Home tech devices are trendy right now, including items such as Alexa and Google Home. These technologies allow voice activation so renters can control lighting, adjust the thermostat, and open and close a garage door. This is more of a luxury than a necessity. However, those who appreciate the technology might be swayed in your direction for this small investment. Not to mention, it can help you stand out from other competing properties.7. Advertise a Bedroom as Potential Office Space
Remote work has grown by 159% over the last 12 years. This means that more people than ever before are working from home, especially with the recent changes in response to Covid-19. Advertising a bedroom as a potential office space can showcase opportunities for remote workers. If your potential office space has windows with a view, all the better. Having a dedicated workspace at home will allow your tenant to have a peaceful and productive work environment.8. Offer Additional Storage Space
Storage space is important to renters. Some small ways you can maximize storage space is with a built-in closet organizer. This is a cost-effective approach and easy to install.
Some Phoenix property rental managers can make extra money if they have an off-site location for extra storage. For example, cleaning out an unused garage can allow tenants to store items there for an additional fee.
Once the lease is up, the tenant will think twice before moving because of the extra stuff they have to haul from storage.
9. Implement Late Fees
No landlord wants to hassle with late payments, but the reality is that it happens to many Phoenix property rental managers. Implementing late fees can help ensure that tenants make timely payments. Consider charging a percentage of the monthly rent cost to implement as the fee.10. Add Extra Occupant Fees
If another adult moves into the rental property after the lease is signed, an extra occupant fee should be enforced. Remember to update the terms of the lease and revise the difference in the amount that you decide to charge, such as $50.11. Pack a Punch with Paint
Paint is one of the easiest ways to transform a space, making it feel fresh, clean, and up-to-date. This is attractive to tenants, especially when you update your rental with trendy and soothing colors. Since paint color choices can vary so widely, stick to the safe side and choose neutral paint colors. Neutrals include beige, gray, brown, white, and cream.12. Update the Flooring
Another way to quickly freshen up your rental space is by updating the flooring. Outdated flooring can quickly drag down the appearance and perceived value of your rental space. Keep your budget in check when you want to get the maximum value from this project. Some of the most affordable flooring includes vinyl tiles, laminate, tile, and carpet. If you want your rental to command even higher rent rates, consider adding hardwood alternatives, such as engineered hardwood or bamboo flooring, which are not only modern and attractive, but also easy to clean and hold up well through years of residents.13. Finish the Garage
Don’t leave your tenants yearning for more storage space. Finish your unused garage and add functional items such as storage shelves and hanging hooks for gardening tools and bikes. Make sure you finish off the look by finishing the floor as well as the walls.
14. Replace Kitchen, Bathroom, and Door Hardware
Replacing outdated and dingy hardware can bring a new sense of pizzazz to a kitchen. Dazzle potential tenants by choosing from an array of hardware options available, ranging from sleek bar pulls to round knobs with intricate hand-painted designs. This is a fast and easy way to spruce up cabinets and doors without the need to paint or stain.15. Boost Curb Appeal
A Phoenix rental property must have standout curb appeal to help catch the eye of potential tenants. Lackluster or unkept curb appeal can easily sway tenants to look at other properties instead, but the good news is you can fix this with a low investment. Make sure any plants are pruned and trimmed. If the landscape looks bare, consider adding some plants that perk up Phoenix rental properties. Such plants include Red Bird of Paradise, Cape Honeysuckle, Pygmy Date Palm trees, Deer Grass, or a Bougainvillea vine. If you own an older income property, consider power washing it to freshen up the exterior. And don’t forget to touch up the front door. Consider a fresh coat of paint and updating the door hardware to freshen up a weathered exterior.16. Update Old Light Fixtures
Bringing in new light fixtures to your rental property can be a bright idea. While retro and old light fixtures can bring a vintage vibe, remember that a lot of tenants are looking for a modern Phoenix rental property to call home. Just like landscaping, replacing light fixtures can be a quick and easy fix especially if you install it yourself. You can find plenty of options from big box hardware stores that will showcase your rental property in a whole new light. Also, adding light fixtures to the bedrooms will appeal to tenants who don't want the hassle of buying lamps to light the room. This convenience can add to your edge over other rental properties and apartments in the area.17. Replace Old Kitchen Appliances
Old appliances can be inefficient and cost money to upkeep — not to mention the increase in utility bills.
The energy use of an old refrigerator is halved every 15 years. Not only does replacing old appliances help with electricity costs, it also improves the appearance of your kitchen and gives tenants a clean slate for cooking.
