Owning a rental property is one of the best ways to accumulate both short and long term wealth. However, owning a rental property alone doesn’t guarantee a positive return. The best owners take an active approach in improving their property. Without constant maintenance and upgrades even the best properties slowly deteriorate. When they do instead of being an asset they turn into a liability. Fortunately there are a few things you can do to always stay one step ahead of the curve. By thinking outside the box and treating your property like the investment it is you will maximize the return. Here are five things you can do to increase your rent and improve your rental property value.
- Add A Bedroom. One of the great things about real estate is that you can change just about anything with the property. If you want to increase the size of a room you can explore the option of knocking down a wall. If you want to replace the cabinets in the kitchen you can give the room a facelift. An option you should look at in your rental property is adding an extra bedroom. Not only will this give you an extra room for your tenants but will have a great impact on the resale value. The most likely option for this would be if you have a dining room off of the kitchen. The reality is that formal dining rooms just aren’t as popular as they once were, especially in rental properties. By adding a wall and a closet you may have enough to turn your dining room into a bedroom. This can add 10-15% to your monthly rent and be a great selling point down the road.
- Interior Upgrades. Adding a bedroom in your rental property would be a home run but may not always be practical. Instead of making wholesale changes there are plenty of minor upgrades you can make. Tenants are very much like buyers in that they like new things. Sure, you can stretch your old dishwasher to last a few years but with all of the seasonal sales available buying a new one may be more beneficial. The same is the case with any outdated or worn down appliances. Most renters would consider paying slightly more per month on a unit with updated appliances. The same is the case with the overall general appearance of the property. The hallway walls might not be dirty but think of what a fresh coat of paint would do. Every year or so you should consider adding new paint to the interior. If you are using the same neutral colors you won’t have to waste time priming or worrying about a second coat. A final interior upgrade you should consider is with the fixtures. In much the same way as the appliances old fixtures give a horrible first impression. Updating these will not break the bank and will increase short and long term value.
- Exterior Upgrades. The exterior of your rental property is where first impressions are created. Not only does a strong exterior help generate tenants but it can keep them in your property for an extra lease or two. When most landlords think about the exterior they think about the yard and landscaping. These are important but they are just the tip of the iceberg. If you want to create value and demand you should look at the presentation of the exterior. Consider cutting down any large trees or bushes that may hinder the appearance of the property. Think about resealing the driving or transitioning from stone to pavement. The improvements you make to the exterior can make all the difference.
- Amenities. There are several items in a property that can greatly enhance the appeal. Renters want their residence to feel like home. One of the ways you can do this is by adding every convenience. The first item you should look at is an onsite washer & dryer. A dedicated laundry room in the basement or some portion of the property adds immediate value. For many tenants this amenity alone can be a decision maker. Another amenity that retains value is a deck. Your deck doesn’t have to be a giant, elaborate structure. Something relatively small off of the back of the home is often enough. On the flipside you should avoid amenities such as pools and swing sets that take up space and only fit a niche audience. As much as you may like swimming many tenants do not want to have to deal with a pool. When it comes time to sell a pool can actually be a hindrance instead of a help.
- Create A WOW Factor. As soon as potential tenants step foot in the property you want to create a “wow” factor. Regardless of the market there is still plenty of competition out there. You want potential tenants to leave your property with a positive impression. One of the ways you can do this is by updating the flooring. You don’t need to replace the existing flooring but you should definitely rebuff the hardwood floors or steam clean any rugs. Little things such as new welcome matts or new patio furniture give the house a clean, welcoming feel. Whenever renters or buyers leave your property after a viewing you want to create a favorable, lasting impression.
It is not enough to purchase a rental property and wait for checks to roll in. You need to take a proactive approach on building and sustaining value. The little things you do and minor improvements you make will help increase rents or build long term value.
