Maximizing rental income by updating your property.
If you own rental property, you have the potential to enjoy significant long term earnings, provided that your income outstrips expenses and upkeep. In a tough housing market, you may find it difficult to find a quality renter, but by renovating your property you can attract people who are dependable tenants and willing to pay a premium for your apartment or home.
Let’s take a look at some renovations you may want to consider, steps that will add value to your property and command bigger rent payments from new tenants:
First Things First — Before considering massive changes to your property, give some thought to what should be done first. And that is to take care of the “first impressions” tenants see when visiting the property. A clean carpet. Painted walls. Updated and working appliances. If everything is presentable and working, you may not need to invest in a renovation to find the ideal tenant and to charge a competitive monthly rate.
Property Amenities — What does your property offer that others do not? Or, what does it offer that is nicer than similar properties? If you have a two-family home and you occupy one unit, do you allow the tenants to make use of the yard? Consider offering patio space with a separate grille and picnic area dedicated for tenant use. If you have a two-car garage, can you allow the tenant to occupy one part of it? In congested areas, any type of off street parking is welcome — if all you can offer is a parking pad, that’s an advantage other landlords might not have.
Update Lighting — Old lighting fixtures, switches and electrical outlets may signal to tenants that your property has aged and has not been maintained. This can be so even with units that are working well. Besides lighting, consider whether the property can handle today’s technologies. Cable access or wireless Internet access might be important to your tenants. Providing an Internet connection can spell the difference between a satisfied tenant and someone who won’t respect your property.
Windows & Doors — Old windows and doors may not be efficient, costing you money especially if you supply the heat. Consider replacing all windows with the latest Energy Star rated units and doing the same for your doors. Although the federal rebate program has ended, these improvements can be beneficial when you sell the property. Tenants appreciate new things including windows that let in full sunlight, but keep drafts at bay.
Security System — Your neighborhood may be safe, but peace of mind comes to the tenant who wants to know that her front door won’t suddenly be kicked in without an alarm blaring and an automatic call to the police made. Security may not be as important to most male tenants, but many women will see this feature and be willing to pay a premium for it especially if you include this with heat, water and garbage pickup.
Other touches can be more extensive, but consider whether your investment can be covered by higher rents. If your property is in a working class neighborhood, you may not be able to command a higher rent. However, you may be able to secure a tenant who is not only reliable with his monthly payments, but someone who won’t bother you with silly requests.
Adv. — Are you looking for ways to save money? Who isn’t! The “Budget Planning and Management” section on our partner website, SayGoodCredit.com, explains why you should have a budget and helps you to learn what to put in your budget. Set up a spending plan and download three free Excel worksheets to help you reach your financial goals.