Increasing your Net Operating Income (NOI) means more monthly cash flow. I am all about cash flow properties. They are my long term goals when searching for investment properties.
Your investment should be paying you cash each month.
If you are unsure about what NOI is, check out: Calculating the Cap Rates for Your Rental Properties
Here are 3 ways to improve your net operating income:
1. Increase Rental Income
Rental income is your main meal ticket. There should be no empty units. You should be at 100% occupancy.
If you currently have an empty unit, your main focus should be filling that unit with a quality tenant.
If you are currently at 100% occupancy it may be time to review your rental rates. When was the last time you raised rent?
Personally, I do not typically raise rent until a tenant has left a unit. I try not to raise rents when I currently have great tenants in a unit.
However, when a tenant plans on moving on, that is a great time to do a rental market analysis and figure out if there is room to increase the rental rate.
2. Find Other Income Sources
Is there any other possible way to generate revenue from your current properties? For example, can you add storage lockers for a monthly fee, can you charge for parking, is there a need for coin operated laundry?
Get creative, maybe an email blast to tenants asking who would sign up for which service or use a particular service is a great way to see if there would be a possible revenue stream from an idea.
3. Lower Operating Expenses
Is there any way to reduce expenses? Take a good look at your properties books. What are you spending money on? Can utilities be lowered in any way?
Finding unique ways to lower operating expenses will only add to your monthly cash flow.
One area my company Greener Project Development Inc. is looking into lower their operating expenses is installing Solar Panels on some buildings where utilities are all included.
We have had success in the past with our Ontario rentals and are looking to bring it to our Nova Scotia properties in the near future.
I will share the process and numbers with you as we move forward.
When you have a great rental property, improving your net operating income simply means more cash flow.
Anyone who frequents this blog knows I am all about cash flow properties.
Take a good look at your rental units and examine if there are any ways to increase your net operating income.
Have some suggestions for our community with something that has worked for you? Let us know by posting in the comments below.