In real estate, there are two key drivers of long term profitability: market appreciation and increasing cash flow. Property owners looking to maximize returns must focus on how to increase NOI, or Net Operating Income, since it directly impacts property value and cash flow. While market appreciation is out of our control, increasing NOI is a strategy that can significantly enhance long term profitability.

But, how to improve NOI?

Improving NOI involves increasing income streams or reducing operating costs. If you’re curious how to increase NOI, some strategies include adjusting lease terms to market rates, using property management software for efficiency, reducing property taxes through reassessment, and diversifying revenue streams.

Below are some powerful strategies to increase NOI in 2025 while keeping tenants happy and maintaining a competitive edge in the local market.

Increase Rent Without Increasing Vacancy

One of the fastest ways to improve NOI is by adjusting rents to match market rates. However, raising rent the wrong way can lead to increased turnover and vacancies, which can hurt your bottom line. 

How to Raise Rent Strategically:

• Analyze Market Rents: Look at comparable properties in the same area. Look at lease terms, unit size, amenities, and age of the building.
• Look at occupancy rates: If your area has high occupancy, you may be undercharging and have room to increase.
• Offer upgrades or value-add features: Tenants are much more likely to accept a rent increase if they see added value. Consider new appliances, smart thermostats, updated flooring, or fresh paint.
• Stagger rent increases: A sudden, significant jump in rent can drive tenants away. Instead, consider gradual increases over time.

Pro Tip:

Never assume that all tenants will accept a rent increase just because market rents are higher. Test increases on lease renewals and gauge responses before rolling out across the property.

Cut Operating Expenses Without Cutting Quality

Every dollar saved on operating costs is a dollar added to NOI, and in multifamily real estate, even small cost reductions can lead to huge value increases.

How to Reduce Expenses Without Sacrificing Tenant Satisfaction:

• Utility savings:  Upgrade to energy-efficient lighting, low-flow plumbing fixtures, and smart thermostats. Even small upgrades can lower utility bills significantly.
• Preventative maintenance: Regular maintenance saves thousands in unexpected repairs. Schedule bi-annual inspections to identify small issues before they become costly emergencies.
• Renegotiate contracts: Shop around for better rates on landscaping, pest control, and security. Many vendors will lower their prices if they think you’re considering a switch.
• Use in-house maintenance: If allowed by local laws, consider using trained handymen for routine maintenance instead of hiring expensive outside contractors.
• Property management software: Automate rent collection, lease renewals, and maintenance requests to improve efficiency.

Pro Tip:

Run a three year expense analysis to track where your money is going and pinpoint areas for savings.

Refinance at a Lower Interest Rate to Increase NOI

Your debt service is likely one of your biggest expenses. If you can refinance at a lower interest rate, you can reduce your mortgage payment and instantly increase NOI.

When to Consider Refinancing:

• Current rates are lower than your existing loan: Even a 0.5% rate reduction can mean tens of thousands in savings over time.
• Your property value has increased: A higher valuation may allow you to refinance at better terms.
• Want to pull equity: A cash out refinance could provide capital for property improvements or new acquisitions.

Pro Tip:

Before refinancing, always calculate your break-even point by dividing refinance costs by your monthly savings. If it takes more than a few years to recoup the costs, it may not be worth it.

Enhance Curb Appeal and Interior Features to Improve NOI 

Improving the curb appeal and interior features of your multifamily property is one of the most effective ways to boost net operating income (NOI). With renters becoming increasingly environmentally conscious and tech-savvy in 2025, property upgrades that reflect these values can significantly increase perceived value and justify higher rents.

Boost Your Property’s Exterior:

• Sustainable Landscaping: Incorporate drought-tolerant landscaping, rain gardens, or xeriscaping to reduce water usage and appeal to eco-conscious renters.
• Smart Outdoor Lighting: LED and solar-powered smart lighting solutions enhance curb appeal while cutting energy costs.
• EV Charging Stations: With the rapid increase in electric vehicle adoption, offering EV charging stations can attract environmentally conscious tenants and command higher rents.

Modernize Interior Features:

• Energy-Efficient Appliances: Installing ENERGY STAR-rated appliances and smart thermostats can significantly reduce energy consumption and appeal to eco-conscious renters.
• Smart Home Technology: Install smart thermostats, smart locks, and advanced security systems to attract tech-savvy tenants looking for convenience and enhanced security.
• High-Speed Internet Infrastructure: Fast and reliable internet service is no longer optional—it’s expected. Upgrading infrastructure to support high-speed internet can justify increased rent premiums.

Prioritize Cleanliness and Presentation:

• Ensure units are professionally cleaned and staged before viewings. Modern, minimalist staging can dramatically increase perceived value.
• Regularly schedule exterior maintenance—fresh paint, neat landscaping, and clear, appealing signage demonstrate a well-managed property and can support higher lease rates.

Pro Tip:

Capture high-quality before-and-after images of your upgrades and sustainable improvements. Sharing these visuals during property tours and in your online marketing highlights your property’s value-add enhancements and can significantly impact tenant interest and justify rent increases.

Offer Value Added Services to Increase NOI

Many landlords leave money on the table by not monetizing amenities and services that tenants are willing to pay for. Adding small but high-demand services can significantly increase NOI without major expenses.

Value-Added Services to Increase NOI:

• Pet fees & pet rent: Charge one-time pet fees or monthly pet rent for tenants with pets.
• Trash valet service: Doorstep trash pickup adds convenience and can generate $10-$25 per unit in additional income.
• Upgraded parking: Offer reserved, covered, or garage parking for an additional monthly fee.
• Laundry services: Install coin-operated or app-based washers and dryers in common areas.
• Storage units: Rent out extra storage space in basements, garages, or sheds.
• Furnished units: Attract short-term tenants and charge a premium for fully furnished units.
• Package Delivery Management: Provide front-desk package handling or concierge services for tenants who frequently shop online or require delivery assistance. Or on-site package management with lockers.
• Housekeeping & Cleaning Services: Partner with local cleaning companies or offer in house cleaning services, creating convenience for tenants and another source of income for your property.
  

A 150 unit property charging $30 per month for pet rent across 30 tenants generates $10,800 in annual NOI, which can add $180,000 in value at a 6% cap rate.

Pro Tip:

Test different value added services and track tenant response before rolling them out across the property.

Increase NOI, Increase Property Value

Every dollar increase in NOI directly increases your property’s value. In commercial real estate, properties are valued using Cap Rates, meaning a small NOI increase can add massive equity gains.

Here is a table detailing various value add strategies, their impact on NOI, and the resulting equity gain for a 100 unit property. The assumptions include a cap rate of 6%, meaning every $1 increase in NOI results in a $16.67 increase in property value.

By making strategic, incremental changes, an investor can increase their net worth by millions, without buying a single new property.