The Ultimate Guide to Rent on Rental Properties

If you're looking to learn more about rent on rental properties, then check out our Ultimate Guide to Rent on Rental Properties.

Rent is income received from renters, tenants and/or tenant-buyers on rental properties.

How to Increase Rent on Rental Properties

If you want to improve cash flow on your rental properties, then increasing rent is one strategy you might want to consider implementing.

Watch our special workshop on how to improve cash flow to learn the strategies for improving cash flow including how to increase rents.

How to Increase Rent Collected on Rental Properties

Increasing the amount of rent on your rental agreement or lease is one thing. Collecting that much rent and minimizing vacancy are different things altogether.

You'll probably want to increase both the rent you're supposed to be receiving and the rent you actually receive.

Here are some tips for increasing the rent you actually receive:

  • Make sure your tenants or tenant-buyers can afford the property by including in your approval criteria a maximum percentage of income that rent can be. It is not uncommon to set this as 33%. Another way of saying this is monthly income must be 3 times rent amount.
  • Verify tenant income by reviewing bank statements (or another reliable proof of income) as part of your tenant approval process.
  • Offer automatic withdrawal of rent from tenant accounts to cut down and tenants forgetting to pay rent.

Calculating Gross Potential Income

Knowing rent on a rental property is critical to calculate Gross Potential Income.

Annual Gross Potential Income

Annual Rent $27,720
+ Annual Other Income + $0
Annual Gross Potential Income = $27,720

Gross Potential Income is how much total income the property could possibly produce from all sources.

For Typical 25% Down Payment Gainesville, Florida Rental Property we take the total amount of rent they could collect and any additional income they might also get from the property.

The rent for Typical 25% Down Payment Gainesville, Florida Rental Property is estimated to be $2,310 per month or $27,720 per year. We'll use the annual amount of $27,720 for our calculation and we will, for now, ignore vacancies... we'll deal with vacancy when calculating Gross Operating Income.

We're estimating $0 in other income from the property.

Some common examples of other income might be: profits from on-site laundry (especially in multi-family), pet rent, renting out extra spaces on the property (like an extra garage or storage unit) or things like that.

That means that Typical 25% Down Payment Gainesville, Florida Rental Property has a Gross Potential Income of $27,720 per year.

And, you'll need the Gross Potential Income to calculate Gross Operating Income, Cash on Cash Return on Investment, Cap Rate and more.

Primary Input

Rent Primary is considered a primary input in the Hierarchy of Real Estate Metrics.

It is used to directly calculate Gross Potential Income Secondary.

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