All investment properties get to the point where they need a little love and care put into them. That love and care will come with a price tag. You want to get the properties into shape, but when should you do that and what should you do? You will know it’s time to make some updates when your rent starts to slide over time. When you get to the point that your house has the lowest rent in the neighborhood, you know changes are necessary. Understand the rental market in your area and what you should be getting for your property. This is important, so do a bit of comparison shopping. Look at houses with similar numbers of bedrooms, bathrooms and square feet. Find out what those properties get in rent every month. If you are at the low end and you’ve had some trouble renting it out, you need to put some money into it.
When you make improvements to your property, you want to ensure you are making the improvements that will bring you the most return on your investment. We talk about keeping a “have to” list versus a “want to” list. When it’s time to do some refurbishing, we take our owners through the home and create a list of all the things that we think must be done to raise the rental value of the property. Then, we add a few things to the list that we’d like to do. Property owners might have an idea of what needs to be done, but they rely on professionals like us who know from experience exactly what is needed.
Once you have your list, prioritize it and get some cost estimates so you know what you’ll need to spend. We always recommend updating the kitchen first. It can be easy to make the kitchen look nice. If you go into the kitchen of your rental home and the stove and the fridge are old, you are going to have a problem renting it out for a good price, and the current tenants will not even want to stay. Put in some nice stainless appliances and slate flooring and you’ve got a premium kitchen that people will be interested in.
Try updating the bathroom with some brushed nickel fixtures. Get rid of anything old and rusty, and refit the tub so it looks new. These are easy things you can do to bring you more bang for your buck. When you get someone to do the work for you, make sure it’s someone you can trust. We work with contractors and vendors time and time again, so they are accountable to us and they take a lot of pride in their work. Hold onto good contractors who are honest and professional.
Once your projects are complete, you have an updated home that will command a higher rent. Bring the amount you are asking up to speed with other properties in the same area that are similar. You will be able to rent the place a lot faster and keep turnover down just by making these improvements.
If you have any questions on how to bring in more rental income on your property, please contact us at Advanced Solutions Property Management. We would love the chance to talk with you.