How To Increase the Value of Your Investment Property
To increase the value of your investment property, the plan begins before the purchase happens. A lot of thought must go into choosing the right property, along with an intention to improve it for added value. Rather than get anxious and make a swift decision, you should wait for the right time, the right property, and only then begin increasing the value.
Choosing wisely means more than just finding the right property. Timing is everything and the real estate market can change overnight.
If prices have sky-rocketed and there seems to be no end in sight, it may not be the right time, especially for a house flipper. Still, if an investor isn’t in a hurry to make a quick profit and rates are insanely low, a purchase could still be wise, as long as there is an understanding that the property may sit a while.
Property investment for the intention of renting, however, needs to be considered differently. What is a reasonable rent that can be charged? Is the market ripe for renters? If so, rent may be enough to cover the mortgage and then some. In that case, it’s never a bad time to buy.
The Magic of Adding a Bedroom
No matter how the investment is being used, either flipping or renting, an additional bedroom immediately increases the value of the property.
Check out the basement and rooms considered offices in the description. More often than not, these areas can become a bedroom. An additional bedroom increases the property value, and that’s good news when selling as a flipper or maintaining as a rental.
Curb appeal—entire television shows have been created over it. The reason being, it’s a big deal.
Curb appeal refers to the first impression everyone gets of your home. It’s what they see before even stepping inside. If curb appeal isn’t appealing, many potential buyers will never step inside and potential renters will go on to the next rental.
Clean up the yard, plant pretty flowers, and paint and repair wherever necessary.
Lower Your Expenses
Investment properties can take a toll on an investor’s wallet. Any way money can be saved is worth looking into.
Sometimes it’s the little things. Inefficient washing machines and dishwashers using more water than necessary in a rental are increasing the water bill that the property owner is likely paying for. Replacing those appliances could save a decent chunk of cash each month. The same could be said for HVAC systems wasting energy.
Who is paying the utilities? Could waste pick-up be transferred to renters? Being a good landlord is important, and you don’t want to be too greedy. However, make sure as the landlord, you aren’t paying for every utility.
Increase the Rent
Let’s face it, when prices are high, we assume something is good. This is a tricky game in real estate. Higher prices may scare away some renters, but they also increase the value of a rental property.
It may take some playing around with numbers to find the sweet spot for something renters can afford, while at the same time, the property’s value can increase; in short, it’s worth looking into.
As we mentioned, the goal isn’t all profit, it’s also to be a good business person and an excellent landlord. Increasing fees can sometimes be overlooked. A property owner may forget that there are reasonable fees to ask for altogether.
Paperwork for rentals is time-consuming and a charge should be required. Where parking is concerned, there is a cost to that upkeep, so charge renters a parking fee. How about when rent is late? A charge for that encourages renters to pay on time and helps the property owner out when they don’t.
These ideas aren’t unkind—they’re a vital part of doing business.
An Additional Bathroom
Just like a bedroom, an additional bathroom adds value to the home when selling, and is appreciated by renters when renting.
A large bedroom could have a bathroom added to it, and it now becomes an en suite. Again, basements sometimes work as an additional bathroom space. Families look for these features, and they are well worth the improvement.
Say Goodbye To Walls
We aren’t suggesting you grab a sledgehammer and start randomly knocking down walls. However, if a non-load-bearing wall can be removed without causing damage, opening up certain areas makes a home look larger, brighter, and catches the eye of potential buyers and renters.
Read house descriptions and you’ll often see “open concept.” Opening the living room to the kitchen gives a feeling of togetherness. In the same way, a basement that has been sectioned into separate areas may be better served as one giant rec room.
Clean Up the Neighborhood
No matter how beautiful your property is, both inside and out, it won’t fare well if it’s right next to a dump.
A property owner may have to roll up their sleeves and see how they can help with trim that needs painting and yards that need mowing. This idea needs to be done with grace and quite carefully—you don’t want to insult any neighbors.
Suggest to neighbors you’d like to help out because you are new to the neighborhood and want everyone to feel good about their home. Let them know it’s just something you enjoy. It could also become a side job for you as the neighborhood handyperson.
In conclusion, there are several ways to increase the value of a property—not only the value for resale, but also the value it’s bringing to your life and your investment portfolio.
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