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6 Different Ways to Generate Cash Flow With a Rental Property

Owning a rental property is obviously a great way to generate regular monthly cash flow in the form of rent checks. But did you know that there are plenty of other ways to increase your monthly income from the same property with alternative cash flow streams?

Alternative Cash Flow Ideas and Strategies

While it all depends on the specific property, there are various ways to get creative and generate several hundred to several thousand dollars in additional monthly cash flow from a property that you’re already renting out…without increasing the rent.

Here are a few options:

1. Lease Out Additional Spaces

One of the best and easiest options is to rent out additional spaces like storage sheds, garages, or basements. Anywhere you have unused square footage – or square footage that extends beyond the basic functions of the main property – look for ways to utilize these.

  • Garage Rental: If your property has a garage that your tenants don’t need, consider renting it out separately. People who live in nearby apartments or houses without a garage might be willing to pay to keep their cars protected or to store seasonal items like bikes or sports equipment.
  • Storage Spaces: Basements, attics, or sheds can also be rented out as storage units. Small businesses or individuals in the area may need extra space to store inventory, equipment, or personal items. By renting out these spaces, you can add an extra income stream without much additional work.

You can choose to rent these out to the current tenant, or – depending on how you structure your lease agreement – you could offer these to other people or businesses. The choice is yours.

2. Rent Out Parking Spaces

If you own a property in a busy city or crowded urban area where street parking is scarce, you could potentially rent out parking on your property. This is usually monetized using one of the following strategies:

  • Monthly Parking Leases: Rent out parking spaces on a monthly basis. This is ideal if you have extra spots that your tenants don’t use. You can charge a premium if parking is scarce in your area.
  • Daily or Hourly Parking: If your property is located near a business district, event venue, or public transportation hub, consider offering daily or hourly parking for commuters or event-goers. Platforms like JustPark or SpotHero can help you manage bookings and payments, meaning you don’t have to hire anyone to run the parking.

You could also use a hybrid of these strategies, if your property is located in the right place. For example, you could rent out monthly parking to people who work in the area. But instead of giving them around-the-clock access, you can set up the lease agreement to where they only have access Monday through Friday during business hours. Then on the weekends, you could rent it out on an hourly basis or events..

3. Monetize Vending Machines

If you own an apartment building or multi-family property, you could install vending machines to generate additional cash. Obviously you could do a traditional snack and beverage machine, but you could also do one that sells laundry products or other household essentials (like dish soap, bath soap, and cleaning supplies).

4. Offer Additional Services

While a lot of the vending machine ideas are only suited for multi-family properties, there are still additional services that you can add onto a single-family property. For example, if your property doesn’t have an in-unit laundry, you could hire someone to do laundry service and charge a small fee on top of that to generate additional revenue. The same goes for housekeeping and pet services. 

5. Lease Advertising Space

If you have a property that’s in a prime location with lots of visibility, there may be options to sell advertising space. For example, a rural property on the side of a highway or interstate might be a candidate for a billboard. Or if you own a large property in the city with minimal zoning restrictions, you could place a digital display board on the side of your property (or a painted mural for organic advertising).

6. Lease Rooftop Space

If your property has a flat roof, you can lease the rooftop for various purposes, generating additional income. Rooftop spaces can be rented out for events, or you can lease the space to telecommunications companies for cell towers or antennas.

Cell phone companies and other telecommunication providers often need space to place antennas or small towers. Renting out your rooftop space for this purpose can provide a stable income stream.

Another option is to create a rooftop garden or lease the space to someone who wants to start a small urban farm or greenhouse. This not only generates income but can also add value to the property.

What’s Your Cash Flow Goal?

Every rental property situation is going to be unique, as property-specific elements and other situational circumstances will dictate which cash flow strategies you can use. Having said that, it’s a good idea to set some goals.

As a general benchmark, you should aim to get an additional 10 percent in monthly revenue per property. In other words, if you’re charging $1,000 for rent, you should aim to get at least $100 in additional monthly revenue from alternative cash flow ideas. If your rent is $2,000, you should aim for $200, etc.

To be honest, this is a pretty low figure – but it’s the bare minimum that you should aim for. In many cases, real estate investors with the right properties are able to generate 25 to 75 percent in additional income. 

Investing With Revenue Versatility in Mind

Once you start to understand all of the different ways you can use a rental property to generate income beyond standard lease agreements, it changes the way you view real estate investing. You’ll find yourself looking for and analyzing your next deal differently. You’ll start to see AUDs, rooftops, multi-family units, and large yards differently. 

While an additional 10 percent might not make you rich overnight, the increase in profits compounds over time. If you’re able to generate an extra $150 to $400 per property per month, you can easily increase your annual income by a few thousand dollars with minimal additional effort.

Your lease income will always be the bread and butter, but you can sweeten things a bit by pursuing alternative streams like the ones outlined in this article!

Sky Richardson
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