A rental property should be an asset that appreciates over time, unlike other assets that depreciate, such as vehicles. As a landlord, you should be working to maintain or improve your rental property’s value to make it more sustainable and profitable as a long-term investment.
Accomplishing this goal requires continuous involvement and investment in your rental home to keep it functional and attractive to prospective tenants. It is a time-consuming but worthwhile process. Here are some tips landlords should use to keep their rental property’s value increasing:
A rental home that stands out because it looks presentable from the outside is likely to attract more tenants’ interest and raise the property value.
Many landlords have their garden landscaped and include garden services in their rental prices. They do not rely on tenants to keep the garden looking presentable. Most renters will pay extra to have someone do the garden work on their behalf.
A shabby-looking house will not appreciate at the same rate as a well-maintained one.
Therefore, landlords should engage in a continuous maintenance program to keep up the appearance of their rental property’s exterior. Maintenance costs much less than repairs as it is preventive.
For example, landlords should undertake regular gutter cleaning instead of waiting for the problem to become so extensive that the gutters need replacement.
Maintenance tasks that need scheduled attention are inspecting the roof and windows for damages, regular painting of the house’s exterior.
Each maintenance activity you undertake positively affects your property’s value, entitling you to charge more rent. Always weigh the maintenance cost against the potential increased income it could earn you.
You should establish a network of reliable contractors that perform maintenance tasks on your rental homes without overcharging.
Two areas you should focus on when renovating are the kitchen and bathroom. Bedroom closets should be a secondary consideration as tenants prefer homes with sufficient storage space.
Upgrading these rooms can drastically increase your rental home’s value. However, overspending on renovations can wind up costing you more than the value increase they create.
The trick is to find a balance between revamping to achieve a top-quality look without spending too much money.
Shop around when hiring contractors to do renovations in your rental home. The cheapest quotation is not necessarily the best, but neither is the most expensive.
Opt for a middle-of-the-road price that offers you value for money. Keep your renovations neutral, using understated colors that renters can decorate using accents and décor colors they favor.
Choose functional kitchen appliances that offer extended warranties and can withstand the workload a tenant expects from them.
Running lean operations
Any reduction in operational expenditure improves a property’s value because valuations are based on the income approach. Keeping expenses down while still maintaining a great-looking property increases a property’s profitability.
Therefore, landlords must strike a balance between cutting costs and continuing to supply a top-quality rental home. It is a fine line to tread, and many landlords learn to master it through trial and error.
Green building features and systems reduce operating costs and improve a property’s value.
With the media’s emphasis on combating global warming, landlords who look to go green tend to get more tenant applications from potential renters willing to pay extra, knowing that their rental’s carbon footprint is minimal.
Such steps also find favor with financial institutions when they value properties as they are sustainable solutions. Additionally, many states have cash incentives for homeowners who implement green systems.
Capital expenditure could potentially increase your rental property’s value. For example, building or extending a garage immediately makes a property more valuable.
Tenants will pay more to know their cars are safe and they have additional storage space. As mentioned before, income potential plays a significant role in property valuation.
Landlords find that installing an alarm system and charging renters for monthly monitoring also improves their property value.
Tenants are happy to pay extra rent for peace of mind, knowing their possessions are protected from criminals.
These improvements allow landlords to charge rental fees slightly higher than comparable rental homes without such features, generating more income for the landlord and improving the property’s income ratio.