4 Tips to Increase Income in Your Apartment Investments

The main source of income for Multifamily Real Estate comes through rental income. There are also other various ways to create income, which can make your deal that much sweeter. In this blog, we will outline the different methods in creating more streams of income through your rental units.

What You Should Know to Increase Income From Your Apartment Investments

RUBS (Ratio Utility Billing System)

RUBS is all about charging tenants a small monthly fee for utilities that they are not already paying. In most cases, these utilities are water and sewer. RUBS is a flat fee and is common throughout the Midwest. At Jb2 Investments, we tend to charge $30-50 per month depending on the size of the unit. It may not seem like much, but when you spread it across 50 or more units, it can make a sizable difference. We would only charge this in areas where it is a common practice as want to be in line with what the market is offering. If we charged this in areas where it wasn’t common practice, we could potentially scare tenants away.

Water Conservation

Installing water conservation devices can be a great way to save money in the long term. Installing items such as low-flow toilets, showerheads, and faucets can significantly reduce your monthly water bills. Though you will have to make an investment upfront, if you plan to hold onto an asset for five or more years, we highly recommend considering this strategy.  

There are companies in every market that specialize in this service and will give you a full analysis and quote on how much it will cost to install everything you need. Not only that, but reputable installers can also provide you with an estimate on what you will save based on your current water bill. You can use these data points to determine if the savings will be worth it.

Laundry Income

Having onsite laundry is a quality amenity that you can provide for your tenants. Think about it. It’s a pain to haul all of your laundry and wait for it to wash and dry at an outside laundromat. It’s far more efficient to walk down the stairs or take a ride down the elevator, put your clothes in the wash, and wait it out in your apartment while you get other things done.

Tenants look for on-site laundry services when choosing an apartment building. An additional advantage, as an owner, is that offering this to your tenants can bring you more income. The Jb2 Investments team uses a company that installs their own laundry units at no cost to the owner and the profits are then split equally. This company also services the units when they are having issues.

Not only does this arrangement mean that we do not need to purchase or maintain the units, but we still make a profit. For us, offering laundry services to our tenants is a win-win situation. And, depending on the market, at times it can make sense to provide laundry in the unit itself depending on possible rent premiums.

Traditional Fees

Charging for applications, late fees, and pet fees, can also help you to gain more revenue. Though we don’t want to drown tenants with fees on everything, we do want to charge fees where it makes sense. And, we want the arrangement to be reasonable for both parties. Instead of a pet deposit, we will charge a pet fee as it’s more than likely pets will cause some type of damage over the course of time. Late fees are also necessary to make sure tenants pay within the agreed-upon timeframe. When there is no penalty to the tenant, they are more likely to pay late. Of course, during COVID certain exceptions were made, but this was an exception to the overall rule, and the exception made sense as we all worked together to get through the pandemic.

In Conclusion

To conclude, there are various strategies to implement to boost your revenue overall. We feel it’s important to be conservative when underwriting this extra income and it’s better to consider it more of a bonus.

Our goal is to be fair with tenants and not surprise them with hidden unreasonable fees. Therefore, we are upfront with them and disclose these items in the lease agreement. Ultimately, the goal is to have quality tenants that stay for a long time.