Owning real estate is a process and one that you have to be
able to adapt according to demand, economic changes and to be able to keep up
with normal wear and tear that occurs over time.
You own a rental, a portfolio of rentals or you are trying
to create a pro-forma for a potential rental. You want to find ways to add value and get your bottom line as high as
possible. You need to know where to start. What gets you the most bang for your buck? Here are a few updates to consider.
Is the property utilizing its rentable space? Is there a carport that could be closed to create an extra bedroom suite? Is there a portion of a basement that could be finished? Is there room to make a half bath into a full bath? Closets in every potential bedroom? Sometimes square footage can be added, sometimes it’s a matter of changing the current square footage to get more bedrooms/bathrooms or a more desirable layout. A note about layout, this will not yield you dollar for dollar returns but it may shrink your market days.
Making simple cosmetic updates may be the way to go. It could be swapping flush mount lights for ceiling fans, updating kitchen hardware, replacing a bathroom vanity or the favorite go-to, swapping out kitchen countertops for a more durable stone.
This may seem obvious, but it needs to be said. Try to reduce your monthly expenses. If you use a property management company like LambrosPM, we handle this by negotiating low cost lawn care options, we use our employees to help diagnose maintenance issues when possible to avoid outside vendor costs, we do property checks to make sure vacant properties are not over-using utilities, etc. Annual costs such as general pest control, home warranties, termite renewals, etc can be shopped around. Don’t feel obligated to stick to one particular provider.
Do you have a multi-family unit? Having each unit separately metered is the best way to keep utility costs down during vacancy and to keep tenants responsible for their own usage.
Keep your eyes on your property. You want to fix small issues before they turn into large ones. This means if it is tenant occupied, you need to have at least annual inspections to note any changes in the condition of the property. Videos and pictures should always be kept on file.
Update your appliances. Stainless steel packages have dropped in price over the years and you can always find great prices, especially during high sales times such as Labor Day and the beginning of the year. Shop around, read reviews and make sure you understand their warranties.
Curb appeal matters. It’s human nature to be drawn to “pretty” things. Tenants have to see the exterior before they can go inside to see the rest of the property. Keep things clean and low maintenance. Think about adding hardy evergreens, stone-scapes or similar maintenance free items and always pressure wash!
Use durable materials where possible. This means ditch the carpet if you can put in a nice LVT option instead. We addressed stone countertops before but not only does it look nicer, it lasts longer with less issues.
Keep it bright and simple. Paint choice can play so much into the feel a space gives.Keep the options light and avoid flat paint on walls. It makes for a much harder touch-up job in between tenants.
Offer more amenities or upgrade options to your tenants. What does that mean? You could offer a washer/dryer and bump the rent up $20/month. Consider allowing pets with a non-refundable pet deposit. Could you spruce up an outdoor space with a table and chairs? What about access to an alarm? Permanent window treatments are often overlooked and a huge expense for renters. If already provided, you have a much more complete package to sell.
Bottom line, you don’t want to over-spend and try to make
your rental align with your tastes and likeness. You need to be mindful of its potential
tenant base and then decide what needs to be done to suite their preferences
and what you will see a return on. A
LambrosPM associate will always do a pre-listing walkthrough and provide