Real estate is considered a reasonably safe investment, since its value over time will naturally appreciate. However, landlords who own investment properties need to maintain their real estate for the value to increase. To make the steps you need to take easier to understand, we will discuss 5 ways to increase the value of your rental property. Keep in mind that a more valuable property will generate a higher rental rate and attract more interest from quality tenants.
Here are 5 ways to increase the value of your rental property:
1. Renovate for Currently Trending Features
One of the best ways to increase the value of your rental property is to renovate and remodel. The trick is figuring out which renovations will increase your property’s value the most, and which will give you an immediate return. Unfortunately, there is no easy, universal answer. Talk to your trusted agent or property management company about which features tenants are interested in, what’s currently popular, and what tenants think after viewing properties.
The renovations you should focus on will depend on the type of property you own, for example, if it is a house or an apartment. It can also depend on the location and neighborhood. If you are renting a single family home, you can focus on renovations that will improve the quality of life for the family – like having a large dining area or an outdoor space for entertaining guests. On the other hand, if you are renting an apartment near a university, you may want to focus on installing amenities that are important to students, like high-speed internet.
2. Invest in the Kitchen and Bathroom
Keep in mind that any money you put into your property typically will increase its value over-time. However, if you are looking for the safest long-term investment, you should consider remodeling the kitchen and bathroom. This can be especially important for a rental property since these are the two rooms your tenants might have the least impact on. So it’s a good idea to have them set up looking their best. Think of it this way, your tenants can always get new curtains or area rugs, but they can’t really change out the tile or fixtures set in these rooms.
If you want to rent out your property quickly, you’ll need to have a functional and esthetically pleasing kitchen and bathroom. These two rooms are the first thing potential tenants check out when an agent or property manager is showing a rental property.
Not only are kitchen and bathroom improvements popular with tenants, but they also have a good return on your investment. Down the line, if you decide to sell the property, you’ll get a reasonable price for the money you previously put into it. However, keep in mind that you are directly increasing the value of your rental through renovation, so you could also be dealing with a higher property tax. That’s why you should focus on investments that can increase the value as well as the rent.
3. Have Modern Appliances
A good way to increase the value of your rental property without investing too much money is to update the home appliances. Make sure that everything is new and up to date. Don’t just offload all of your old appliances to your rental because that’s a good way to quickly deter prospective tenants.
Before signing new renters, you should check to see that everything is functioning correctly. When replacing appliances for your rental, it’s a good idea to get matching sets since it will make the home look much more appealing. You can get rid of the old, mismatched sets by selling them second-hand.
4. Paint Your Home
Landlords often underestimate the importance of having your rental property in a great make-ready condition. Properties that are fully set up, clean and presentable can be rented out faster and for more money. Giving your home a fresh coat of paint can really liven it up and make it more appealing to tenants. Remember to paint both the inside and outside of your property. While you are at it, you can touch up your front door as well. It’s one of the first things people see when they enter your home, and first impressions matter.
5. Invest in Curb Appeal
While we are on the topic of first impressions, it’s a great idea to start working on the exterior of your property even before future tenants come to view it. Our property managers visit plenty of rental properties, and homes with good curb appeal constantly get valued higher and generate more interest from tenants.
Do some landscaping and make your property look amazing even when viewed from the sidewalk. If you have a garden, make sure it’s well kept. Additionally, ensure that your lawn is mowed, the sidewalks and landings are edged, and the common outdoor areas have been given an in-depth cleaning. People love imagining themselves spending summer afternoons outdoors, and you can plant that idea in their heads by sprucing up the exterior spaces.
Maintain the Value of Your Rental Property
Regardless of how you plan to increase the value of your rental property, you should also do your due diligence by maintaining it on a regular basis. Owning an investment property has its pros and cons, and it also represents a long-term obligation. However, if you make a sound investment decision when purchasing a rental property, you should also continuously invest into your investment. Providing regular maintenance is much more efficient than just waiting for something to go wrong – and it usually costs you less in the long run as well. Talk to a professional property management company to see if they can handle property maintenance and care (and so much more) so that you have one less thing to worry about.
The Bottom Line
Now that we’ve looked at 6 ways to increase the value of your rental, it’s up to you to determine how much money you are willing to invest. When determining your priority upgrades, you should consider your property’s strengths and weaknesses. Start with the renovations that have the highest return, and you’ll soon see a boost in your rental income.
Ready to Partner with 1836PM?
If you’re looking to partner with a team of dedicated Austin property management professionals, then reach out to us! Our goal is to help take the pressure of being a landlord off of investors, and help them reach their financial goals strategically and effectively.
By: Kayla Gonzales, 1836PM Marketing Manager