5 Simple Lease Clauses to Help You Make More Money

Written on June 13, 2016 by , updated on December 9, 2016

Lease clauseI’m not a landlord for the fun of it. I like to make money and to provide for my family.

If rental properties are just a hobby for you, please go troll YouTube instead of reading this article.

If, however, you do have an open mind to making extra money through moneymaking lease clauses, and want to grow your business, this might be the best article you read all day! Let’s get started!

1. Monthly Pets Fees

My dog, Bear HallAllowing pets is one of my favorite strategies for making money. It puts you in a competitive advantage in the marketplace, particularly if nearby rentals don’t allow pets.

How much extra money can you make by allowing pets? In many markets, it’s reasonable to charge an extra $25-50 a month per pet. If you’re already getting premium rent, you might wish to make an exception and let up to two pets stay for a single pet fee.

High Demand + Limited Supply Of Pet-Friendly Rental Properties = Pricing Power

While monthly pet fees are common, I don’t think it’s wise to charge a non-refundable pet deposit. “Deposits” by definition, are refundable. A “non-refundable deposit” is simply a fee – so stop confusing the tenant and just call it a one-time fee.

Related:

If you think pets aren’t worth the hassle, when you consider that you could potentially make an extra $480 per year per property in pet rent by allowing them, you might change your mind. Just be aware that pets might cause additional damage, so be sure to collect a security deposit, in the amount of 1-2 month’s rent, from the tenants.

Example Lease Clause:

2. Rent Storage Space

If you have a portable storage shed or a slightly weird barn (happened to me) on your property, you could try to sell it. But if you have no luck, consider renting it to your tenant. If it’s a large shed, an extra $30/month is probably reasonable. After all, professional facility storage units are typically more than $30/month.

Lack Of Room + Extra Storage 5 feet away = Easy Sell

This doesn’t even have to be a lease clause (although it can be). You can have your tenant sign a separate agreement for storage. While $30/month might not be a significant amount of money, it is worthwhile considering you did zero work to make this money!

Related: How to Make Extra Money by Renting Storage Space to Non-Tenants

Example Lease Clause:

3. Landscaping Fee

The industry standard for single family homes, is for the tenant to maintain the lawn and landscaping. When you’re going over the lease documents, describe the tenant’s landscaping duties.

And then wait for a response.

If they don’t say anything, ask them whether they have a lawnmower, weed eater, and other lawn maintenance tools.

They will probably give you a strange look – which is great.

Yard Responsibility + Lack Of Tools = Making Extra Money

Here is where you offer to take over the landscaping duties. You would then get somebody to cut the grass. If it costs you $30 a month, charge your tenant $40 a month – a profit of $10 for your management services. Keep in mind you pay nothing in the winter, but you still collect the extra $40 each month.

Example Lease Clause:

4. Subleasing

If you don’t outlaw subleasing, your tenants will do it when you’re not looking. Worse, you can’t penalize them for it without a clause in your lease.

I always prefer to allow subleasing, for a price. I give my tenants the option to sublease, but they have to pay a one-time fee. Further, the sublessee has to submit an application and is subject to my normal screening process and subsequent approval, only to eventually sign a subleasing agreement.

Example Lease Clause:

5. Early Termination Fee

It’s very likely that many tenants will want to terminate the lease early, and they can’t/won’t be bothered with trying to find a replacement. For them, paying an early termination fee is the most attractive option.

You should address this possible situation, and decide if you want to include a fee to terminate the lease. This buys them freedom from the lease so they can’t be held responsible for the remaining balance.

Example Lease Clause:

Did I leave any moneymaking lease clauses out? Let me know in the comments!

Get our free newsletter

Join 200,000+ landlords

  • ​Tips to increase income
  • Time-saving techniques
  • ​Powerful tools & resources

3 CommentsLeave a Comment

Join the Discussion

Your email address will not be published. Required fields are marked *

 characters available. Be short, sweet and to the point.