How to Make the Most Money Possible from Your Rental Property

0:00This is how to make the most money from your rental property right now in 2025. Because it's great to scale your portfolio and add more units, but ultimately you're investing to make more money, not just to have a bigger and bigger door count. The amount of cash flow your portfolio produces is what actually matters, and your current properties might be leaving income on the table. So today we're sharing some ideas you may not have thought about. This is how you add to your cash flow every month with the properties you already own. Keep listening if you want to learn how to put more money in your pocket without another tenant or another tax bill to worry about.

0:43Hey, everyone. I'm Dave Meyer. I'm a rental property investor and the head of real estate investing here at Picker Pockets. And with me today on the podcast is my friend, Henry Washington. Henry, what's up, man?

0:54Brandon Turner:Hey, what's up, Dave? Glad to be here. Well, I'm excited to have you here today because I think this is a topic near and dear to both of our hearts. Both of us, I think, in our careers over the last couple of years have really tried to focus on making the most of the least amount of properties and not trying to just get more and more doors and just trying to reach your financial goals in the most efficient way possible. And for our audience here today, we're going to share some ideas that Henry and I have, some new strategies, amenities to add, investments you can make to increase your cash flow without necessarily the big upfront investment of buying entire new properties or the headache of managing more units.

1:35So let's start with the big ones, Henry. What do you think is the biggest opportunity for people to add more income or maybe just even produce income more efficiently on their existing portfolio?

1:49Brandon Turner:There are things that may not necessarily increase the value of your property but can add value to your bottom line. In other words, there are things that create an emotional response. And when people have an emotional response, they can typically want to pay more because they've emotionally been tied to your property. And then there are actual things that if you do them can produce more income. Do you mean like pay more like in rent? Yes. Like the ways to drive up the rent. Yeah. Right. So when I say that emotional response, what I call it is perceived value. Right. When someone walks into your place, you want them to go, ooh, that's cool.

2:22Brandon Turner:Right. And when they have that emotional response, they may be willing to pay more to live in your unit than to live in some of the other units they're seeing that don't elicit an emotional response from them. So that's why we always spend a few hundred extra dollars and we put fancy accent walls into our properties because a lot of rental properties don't have those kind of amenities. People typically only get those kinds of things in homes that they own, but landlords aren't necessarily putting design features into a rental property, right? It's typically just let's make it livable and clean and throw somebody in there.

2:59Brandon Turner:And so I like to spend money on fancy geometric design accent walls and backsplashes in kitchens. So you can put some pretty fancy backsplashes in a kitchen and not spend a ton of money because typically it's not a ton of square footage, right? But people see them and they go, oh, wow, I can have these kinds of amenities without having to own a home. And you may be priced$50 a month higher than your competition or than the unit next door. You may be priced$100 a month higher than the unit next door. And you may get that amount of rent just simply because somebody sees something in your unit that elicits that emotional response from them and makes them want to live there.

3:38So this one makes a lot of sense to me because I do feel like a lot of rental units you go into are just exactly the same. And as a renter, I've rented for many of the last few years. Like you want something that makes it feel like your own, something that makes it feel unique. Before we move on, Henry, let me ask you, what's what's your like surprise and delight? Like when you walk into a house, you're like, oh, I want that. You're saying like a backsplash. Is that yours?

4:04Brandon Turner:No, I like cool outdoor spaces, even though I don't spend a ton of time outdoors. But for me, when I see a cool curated outdoor space, it makes me feel like, okay, this home is bigger than just what's inside the walls. Like I can actually live in more space. It makes the home feel bigger. Like I have a patio on my backyard and I went ahead and I screened it in and I spend a lot of time in my, you know, air quotes, outdoor living room, which is just a patio with a screened in wall. It just makes me feel like I have a bigger home because I have this outdoor space. And then I like, you know, I'm fancy.

4:39Brandon Turner:I like, you know, fancy design stuff. It's cool. When I see, you know, marble countertops or quartz countertops, like that stuff's kind of cool. If I was looking at a place to rent and I could get those kinds of amenities, I would definitely be willing to spend more money to rent that space. I'm totally with you. I look at the like little things, like nothing gets me more hyped about living in a place than like the layout of the kitchen. Like if they have like the nice inserts in the drawers and in the cabinets, I like to cook. So I can organize that stuff. Like I would pay more for that kind of stuff.

5:07But you never see that in a rental property or just little accents in the bathroom. Like those are the kinds of things people really appreciate. And they're not big investments. Like these are things that you can do with just a couple hundred or a couple thousand dollars. And that's the thing I really like about this approach because a lot of times people come to me and they want to scale or they want to figure out how to make more money, but they don't have money for a down payment on the next property. That's a very common situation that pretty much everyone runs into. But these are the kind of upgrades that you can make in real time.

5:43Like if you are hopefully earning more than you spend every month in your personal life and you can save two, three hundred bucks a month, like you can make one of these improvements a month or you could save up for three months and make one of these improvements. And it's just a way that you can continuously improve the performance of your portfolio while you're figuring out where to buy that next deal.

6:04Brandon Turner:What I would do if I was a listener of this show, what I would do is pull the comps for your rental property in question. In other words, go look at what people who want to rent your unit are also looking at. And I think you're going to find what Dave said earlier is that they all typically look alike. They all have similar finishes. They all have those gray walls with the white trim and the same carpet. They look lifeless. Yes. They look like no one cares about you, the tenant. They just want a roof over your head. And so then take that and then take our list of things that we're talking about and start pricing them out and seeing what you can do.

6:45Brandon Turner:And I bet you, I bet you, you can command more rent for your market. Maybe it's 50 bucks a month more. Maybe it's a hundred bucks a month more. But I bet that you could probably spend anywhere between$300 to$5 ,000 on some of these upgrades and get$50 to$100 to maybe even$200 more a month rent, depending on the market that you're in. And then if you are commanding that higher rent, your upgrades end up paying for themselves after a few months. And that's just increased cash flow in your pocket. There's plenty of little things that you can do to increase the desirability and give people that emotional reaction.

7:22Brandon Turner:People pay for emotional reactions. Totally. And I think you're like attracting a more discerning tenant, which I like. Pride of ownership, man. Yeah, exactly. Like you want someone who's going to be excited and proud to live in that unit. And I just think a lot of times for me as a smaller landlord, someone who owns mostly two to four unit properties, I am always thinking about how do I compete against the bigger landlords, the people who are putting out 200 unit properties or Blackstone or whomever. And this is how you compete, right? Like they're not going to do this stuff. No one who owns a 200 unit property is going to go in and think about how to add unique characteristics to each of their 200 things.

8:04It's not in their business model. They are cookie cutter. You as a small landlord, like go care about your property and go make these thoughtful upgrades. And it's going to stand out. And honestly, this actually, I think in a lot of circumstances can improve your cash flow more than buying another property. And on an efficiency basis, like cash on cash return wise, I think it almost always works better than buying another property.

8:27Brandon Turner:Absolutely. That return on investment is huge. And so when I think about changes you can make that actually do impact the value of the home, right? So not emotional changes, but actual changes you can make. some of the things that we've done in the past are including laundry in your units. In other words, there's a lot of units that don't have even have laundry hookups. So you providing laundry hookups is an added amenity, which means you can charge more because somebody doesn't have to go to the laundromat, or you can actually just provide the washers and dryers themselves, which lessens the expense on the tenant, which means they may pay you more to live there because they know they get a washer and dryer.

9:08Brandon Turner:The caveat with adding washers and dryers is they do add maintenance costs to your ownership. And so I would talk to your property manager or a property management company just about the trade-offs because they're going to have data to be able to tell you if you provide laundry, expect XYZ in maintenance a year. And then you can do the math to figure if I get more rent, but I'm paying more maintenance, is it a wash or do I actually make more money? And then if adding and providing the laundry doesn't work for you, you can actually rent washers and dryers to your tenants as well, which can produce income for you.

9:41Brandon Turner:Because you can say, no, we don't provide the washers and dryers, but you can rent them from us. And that keeps income coming in. Also, you can charge more rent because you have it. And so it's kind of like getting paid twice on some of those things. Have you ever added storage? That's something I've thought about. Because I've bought properties that have garages or a garage that's honestly just so crappy that you can't park a car there, but like, it's totally fine for storage. But I've recently been thinking about like, you know, you could buy these sheds. Sometimes you could just buy them secondhand, like tough sheds and kind of stuff and putting them on your property and renting them out.

10:16Have you ever done that?

10:17Brandon Turner:I've never bought storage to rent, but we've rented space that came with the property. So, um, we had a property that had some garages and, uh, no one was parking in them. So we would just rent them to the tenants who wanted them for 25 to 50 bucks a month additional. Yeah, that's what I've done. But I've been just looking at Facebook Marketplace and you could buy these things for sometimes 1 ,500 bucks, like nice ones, 2 ,000 bucks. You could rent them for 100 bucks a month. I'm like, I should just do this all day. And I don't want to negatively impact my tenants who lives their experience. So you have to figure out a way to fence it off or just making an okay experience.

10:57But I'm kind of like, you can just make more money that way. It's a good way to add value.

11:01Brandon Turner:Absolutely, man. Another thing you can do for laundry is, especially if you have a property with four units or more, is if you don't have laundry hookups and you don't want to pay to put laundry hookups in your property, you could create like a laundry space in a basement or garage. and then you can either offer coin operated or you can partner. There's companies who will supply the washers and dryers. They will maintenance the washers and dryers. All you have to do is take a split of the profits. So they usually will do like a 60-40 or a 50-50 depending on the company. They'll provide all the machines.

11:41Brandon Turner:They'll do all the services. You don't really have to do anything except get paid every month. That's like the two to four unit special, man. And like you've seen when we were going around the Midwest, a lot of these old buildings, the basements just aren't livable. But like, you know, they're too short or they smell or whatever. And it's like it's a perfect place to do this kind of thing. And it works in like a lot of buildings, more than you would think, at least in the places I invest that have these older style homes. So I think this is a great category for just generally finding ways to increase rent through adding unique amenities.

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15:33Welcome back to the BiggerPockets podcast. I'm here with Henry Washington talking about how to make the most of the units that you already have. Before the break, we talked about adding unique amenities that will attract great tenants who are willing to pay more for those amenities. Next, I want to go to the one I really love and I've been thinking about a lot, which is just adding more capacity. Buying a property that maybe has a basement that's unfinished, or there's a split level that you can split into two different units, or there's a single family home that has three bedrooms that you can make into five bedrooms.

16:11I think this idea of just taking what you got and making it more efficient for you is one of the best ways you can make money in real estate, regardless of if you're buying a new one or doing this to your existing home. Just, I love this playbook.

16:25Brandon Turner:This method almost always produces a better cash on cash return than buying a new unit. Now, this method typically is going to cost you some money. So if you're in a boat where you're like, hey, I've got$20 ,000,$30 ,000, do I go put it as a down payment on my next property? Or do I try to increase my ROI and what I currently have? This method is something I'd encourage you to look at, and you don't even need that much money. My favorite way to do this is on mostly all of my units that have a single car garage. I convert the single car garage into a bedroom. Townhome styles that have a single car garage, two bedrooms or three bedrooms upstairs with the bathroom, and then downstairs is just a living room and a kitchen.

17:04Brandon Turner:All of those that I own, I've converted the single car garages into bedrooms. Every time I have a rental property with a single car garage, no one parks a car in it. It's just always full of stuff, always. Maybe tell us the numbers. What does it cost you to convert one of those? I've spent as little as five grand and as much as 12 grand to convert a bedroom. That's not bad at all. Nope. And what do you think it adds to your rent? Where I've done it most recently, it adds two to$300 a month in rent. So you're making, let's just call your average price nine grand on something like this. And you're, yeah, and you're making three and a half grand.

17:38And so that's a three-year payoff on that investment. That's like a 30 % cash on cash return. Like that's incredible. That's a really good investment for anyone to make.

17:49Brandon Turner:And people always say, especially when I like post about this on Instagram, they're like, well, I like a garage, so I wouldn't rent there. Perfect, then don't. But most people don't use the garage. Even though they say they want one, they don't use it to park a car and it literally just stores stuff. So like in somebody, for somebody like you, Dave, if you've got one, you could convert the single car garage to a bedroom, increase your rent, and then go get that storage shed, put it in the back, and then they could put the stuff in the storage stand and pay you extra for the storage. Combo. I think the other thing in addition to doing this is like, I've been looking at this here in Seattle because there's a lot of split levels where they have a walk-off and separate entrances, and just turning it into two units.

18:30Like you could basically have two 1 ,000 to 1 ,400 square foot units instead of one 2 ,800 square foot unit, which is just kind of the trend in a city like Seattle. I know in some markets people really want like the big homes, but like in a city, like most people are accustomed to living in 1 ,000, 1 ,200, 1 ,400 square feet. And you can just add capacity and there's already a driveway that fits all these people. You need to do like the hookup, like you said. You need to put some laundry in there. You need to add a kitchen, of course, but that can potentially make something in a city like Seattle or expensive market actually cash flow.

19:07Whereas if you just bought as a single family, there's no way.

19:09Brandon Turner:I've talked to other investors who do that specifically as a strategy, just converting the basement to a living unit. And now you're essentially sitting on a duplex. And you can also do strategies where you take that three bed, two bath, single family home. That's a split where the primary bedroom is one side of the house and then the two or three other bedrooms in the bathroom are on the other. There are people who have split that into two units because your primary bedroom, essentially, if you put a kitchenette in it, can be like a studio unit. And then the other three bedrooms, the kitchen and the bathroom are its own home.

19:43Brandon Turner:If you're in a place like Seattle or a more expensive, more metropolitan area, properties where you can do that make more sense than in a place like where I live. But that's an option given your demographic. Yeah. And just like to put some numbers behind it. Like these houses are still expensive. But, you know, if you bought a house that was, let's just say,$500 ,000,$600 ,000, you'd probably get$3 ,500 in rent, something like that. But if you've spent another 50 grand between the two units, you're probably getting 5 ,500 bucks in rent. So if you just think about the efficiency of your capital, it just makes the money go a whole lot further.

20:25So I really like that. And I'm starting to underwrite it. I need to learn more about this. But I'm thinking about doing an ADU development, parceling off an ADU. I'm excited about it because in Seattle and a lot more and more cities around the country are allowing you to do this. not just to build an ADU, but I think the critical difference is parceling it off so you can sell it. Or you can sell the main house and hold on to the ADU, or you can sell both of them. But, dude, in Seattle, there are like 1 ,200-square-foot ADUs in the neighborhood I live in. They sell for$750. That's crazy, man. It's insane.