Finding ways to increase property value on a residential rental property requires more than a “sit and wait” approach. For maximum results, a property should be improved. Not only do the improvements add capital value but they also improve the occupancy rate and allow the owner to increase rents on a yearly basis. The end result is a higher net income and a higher valuation on the property for the investor. Here are a few suggestions for increasing the value of your property without breaking the bank in the process:
Paint the roof white: While a white — or any other light-colored — roof is not typically found on residential complexes, it is a mainstay of commercial buildings. A white roof reflects significantly more sunlight, thus reducing the energy load on the building. Not only does the owner benefit from a lower monthly utility bill but so do your tenants. And happy tenants with smaller bills to pay are good paying tenants.
Add a laundry facility: No one likes to clean clothes, especially if they have to make a trek to the local laundromat. If your residential property does not provide in-apartment washers and dryers — or at least hookups — consider spending some money on constructing a communal laundry facility. This undertaking does require space, time and money, but the effort is well worth it. In addition, the site should actually produce some additional income as most of your tenants will be happy to pay for the convenience of the service.
Install a security gate: From a practical and a psychological point of view, this improvement is one of the most important upgrades that a property owner can make. Obviously, it improves the property from the tenants’ point of view, but it also protects against unwanted visitors who might do damage. A simple gate is fine for a small property, but more advanced units should include cameras and a video-archiving system
Include covered parking: Smart investors will properly landscape their property with flowers, shrubs and trees. But while aesthetically pleasing, horticultural elements shed a lot of debris that can mar the paint finish of a car. In fact, some trees can turn a newly washed car into a veritable mess of pollen and leaves in a single evening. For this reason, covered parking is an excellent upgrade. Your tenants will be happier and you can usually charge a higher fee for the assigned parking spot.
Keep up with regular maintenance: Simply put, a well-tended property just looks more valuable. So cut those dead trees and bushes, remove debris every day from common areas, replace burned out bulbs and do all those other odd jobs that you would do at your own home. Also, do not complain if tenants advise of a problem. Instead, thank them and recognize that they are actually helping you protect your investment.
Upgrade the entrance: Without a doubt, many folks judge a book by its cover. Nowhere is this fact more apparent than in the marketing of residential properties. Installing an attractive sign with the relevant information in front of your property is just the start. Consider the proper lighting so it is visible at night and even a water feature. The movement and sound of the water will draw the attention of folks who might otherwise ignore the site.
Remove all carpeting: For years, wall-to-wall carpeting was used to hide a plethora of problems in residential properties. These days, potential residents are demanding tile or wood floors. Initially, it is expensive to make this upgrade, but over time the ROI is significant. Tile and wood floors require less maintenance, last longer and are simplymore popular than carpeting. This fact is especially evident in common areas, so start your remodeling there.
Require renter’s insurance: Renter’s insurance may seem like an unnecessary expense to your worst tenants, but the ones that have something to protect — that is, the ones that you would like to retain — will gladly foot the bill. The cost is usually around $100 for the year. In addition, tenants with renter’s insurance are more apt to be conscious of safety and security — an excellent trait that will help protect your property from damage and limit your liability in the event of an unforeseen occurrence.
Underwrite events: While it is an intangible, a sense of community leads to greater overall value in a residential property. The small amount of money that it takes to fund a BBQ night or a family pool day is recouped in high retention rates and higher rents. You can even attend and get a sense of how well your management team is satisfying the needs of your tenants. In short, it is a win-win-win situation for you, your team and your residents.
Develop a website: It is a fact of 21st century business that property owners must cater to their potential residents. In particular, this means developing an online presence that delivers relevant information in a timely and succinct manner. In addition, your website should be optimized for mobile users as that’s how more and more people access the web.
For more information on these and other ways to increase the value of your residential property, please visit us at Matterhorn-Grp.com or you can reach us directly at 708-588-9611.