When it comes to real estate investing, there are times when “active” management is unavoidable. Sure, there are ways to automate many steps in the process, or even incorporate software solutions to aid in marketing the property, background checks for tenants, rent payment and even inspections. However, when it comes to keeping your rental up to date from a maintenance perspective, or ensuring that you can maximize the rent potential of the property, you have to be aware of what is going on with the property and take proactive measures.
The good news is that when it comes to making sure the property is keeping up with the times and meeting the needs of the modern renter, it does not have to cost an arm and a leg to do so.
Here are 5 cost effective ways to ensure a rental is upgraded:
Replace carpet with wood flooring.
If you are in it for the long haul, this is one of the first things you should do to upgrade the property. This will help maximize the potential rent for the property by helping save on maintenance costs. Most rental home owners find that they have to consistently clean and/or replace the carpet and in the long run, this will also aid in the resale value of the home. There are many wood and quality faux wood options on the market and at the very least, this should be the standard flooring for high traffic areas of the home.
Fresh coat of interior paint.
If the paint color is dated, or if it is just time for a fresh coat, this is a very economic way to freshen up the appearance of the home. Picking a color that is neutral so that it accommodates the color scheme of the fixed interiors of the home is important (i.e. cabinets, floors, countertops etc.). Keep in mind, a neutral color is also important when considering what the tenant will bring into the home. If you keep it neutral, the property will have more appeal when it hits the rental market (and eventually the ‘For Sale’ market). Painting is also one of the manageable DIY projects if you have the hand for it, but is also affordable when looking at a professional to come in and do it for you.
Paint or replace cabinet doors.
The kitchen is consistently ranked as one of the most important elements of the home and nothing screams “dated” more than tired looking cabinets. This is such a manageable and affordable upgrade that there is no reason not to do it. White cabinets is an excellent way to brighten up the kitchen while even giving the impression that the room is bigger. The look is clean, modern and neutral while the maintenance is simple. If white is not in line with the style of the property, you can certainly go with a darker wood, or even replace the handles/knobs to give the cabinets a more modern look. This is an upgrade that will go a long way in ensuring the property is up to date.
The first three suggestions were related to the interior of the home. The exterior landscaping is also something to keep in mind as it changes the curb appeal and goes a long way when it comes to the first impression of the property. This does not have to be hard or expensive, and more often than not, does not have to be contracted. Ensuring the grass is green and well kept, or staining the fence are just a couple of things that will help the property stand out. If the season allows, flowers in the front yard will add some extra color, or painting the trim of the house are also ways to upgrade the curb appeal. If the exterior is well kept, then the tenant will be more confident that the inside of the property is also in good shape.
Something to consider would be to ensure the home has an ongoing internet connection. Many landlords include this feature in the rent and simply charge an amount that will offset the cost. While you may have an occasional vacancy and have to carry that cost, an interested prospect will find this amenity/upgrade attractive as it is one less thing for them to have to do when moving. Nearly 80% of all homes in the U.S. have an internet connection, so this is something that is likely going to be in demand and should be viewed as an opportunity to separate your rental from competing properties. This is also an expense that may be eligible as a tax deduction (as will the other upgrades that have been outlined above).
Hopefully these upgrades have offered a few ideas when it comes to evaluating how you can maximize the rent potential of your property while keeping it competitive with the market. Costs may vary based on the type of work that needs to be done, what you can and are willing to do yourself, and the type of upgrades that you actually decide upon. However, keep in mind that like most things, you get what you put in and a little active management will certainly help maximize the rent potential of your investment.