Extra Landlord Revenue Streams
In these tough financial times some landlords may be looking at how they can pull in a few extra quid from their tenants and their property portfolio. I’ve racked my brains about how I can generate some extra income from my tenants ‘legally’, excluding the obvious – increasing the rent.
Here my list of thoughts. It’s not exhaustive, so it would be great if you have any ideas to just add them to the comments section at the bottom.
Up Front initial charges
The one area that I’ve personally not strayed into is, up front administrative charges. These are made by the landlord as an upfront charge for setting up the tenancy.
- They can include:
- Tenant referencing
- Creating an inventory
- Admin costs for setting up a tenancy (can be an alternative to taking a tenants deposit)
Are they legitimate charges?
Whilst entirely legitimate and legal, I’m slightly uneasy about these charges. To my mind the cost of setting up the tenancy is included in the rent. However this view maybe outdated. If you step back and look at the business models of businesses like budget airlines they charge for everything including using a credit card. Most letting agents will make charges for a tenancy set up so if a landlord deals directly with a tenant then why should it be any different?
In addition to these one off set up charges there are other opportunities to make ongoing revenue from your tenants.
My personal favourite is letting out my garages
I’ve now got quite an extensive collection of classic cars stored in my rented garages. My latest rental is to the proud owner of a Porsche 944…. I already have a flat screened VW camper and 2CV in some others. The great thing about letting out a garage separately, particularly to classic car owners is that:
A. The tenant has more to lose than you do as the landlord (very rare situation). This is because the chances are their treasured classic is often worth more than the garage, so there is no worrying about the tenant not paying the rent. Have a look at this recent article on the details of letting out a garage.
B. Classic car owners in my experience make great tenants. Anybody who is responsible and careful enough to own a classic car will generally make a very good tenant.
Commission on utilities
You may have come across companies like the Utility Warehouse. These companies are like mini franchises providing a landlord an opportunity for signing up their tenant for a whole range of utilities. In return they pay a landlord commission for the initial sign up of their tenant as well as a trail commission relating to their overall spend. This could be particularly lucrative for landlords who have lots of tenants such as HMO landlords. My experience to date is that I’m not particularly impressed. It all seems a bit American evangelical. As I committed atheist I find it hard to believe. Google Utility Warehouse to form your own view.
Ironing, washing, cleaning services. For some inner city landlords with a high proportion of professionals there is always a demand for hard pressed, time poor executives looking to offload some of their domestic chores. If a landlord is astute he can always make a little by acting as a middle man and cross selling these services.
Have you got a view or idea about making additional revenue out of your tenants?
Please post your comments below.