A lot of new real estate investors lack confidence in their decision-making skills, especially when it comes to their first investment properties. They are afraid to spend too much on renovations, and they shy away from making some of the most effective improvements to get more out of their properties. If you’ve acquired an income property, and you want to increase your rental rates, decrease tenant turnover, and generally improve the value of your property or properties, follow these five tips.
A Fresh Coat of Paint
You might be surprised at just how effective a fresh coat of paint can be for improving the value of your investment. You can buy a bucket of paint for between $20 and $30, and you won’t spend much more on brushes, rollers, tape, plastic sheets, and any other materials you need. Then, if you do the work yourself, you’ll have made a major improvement to your property’s value without taking up a lot of your liquid capital.
When you walk into a house, you immediately notice if it has new, plush carpeting or if the carpets are starting to look and feel a little threadbare. Carpeting doesn’t cost a lot of money, and it can make your property look a lot better to your prospective tenants.
Bathroom and Kitchen Renovations
If you’re investing in a turnkey property, you won’t have to worry about this for at least the first few years. If, however, you’ve invested in an older or distressed property, you should have already allocated some funds for renovations. The kitchen and bathrooms (especially the master bath) are some of the best places in the house to spend your renovation budget. People spend time a lot of time in their kitchens, and they want to relax and recharge when they’re taking a shower or getting ready to go out on the town. That’s why kitchens and baths sell houses, and it is why quality tenants always opt for houses with updated kitchens and bathrooms.
If you’re looking for DIY improvements that won’t cost much, landscaping is a great place to start, as well. You don’t have to be a master gardener to add some attractive flowers and shrubberies around the front porch, along the front walk, and/or around the mailbox. And, if your lawn is looking patchy, you can spread some grass seed to fill it in and make it more attractive, too.
A lot of new investment property owners leave the windows alone because replacing them can be somewhat expensive. However, with the improved energy efficiency and aesthetics of new windows, you can add upwards of $10,000 to the value of the house. Plus, they’re a huge selling point with tenants and future buyers because they improve the energy efficiency of the house and can result in much lower utility bills every month.
These improvements won’t be free, but you can make them more cost efficient by doing most of the work yourself. Window replacements and kitchen renovations may be jobs for the professionals, but even with these you can save some money by taking care of smaller jobs yourself, such as demolition and/or small fixture installations.
With these five tips, you can create a budget solution that will improve the value of your real estate investment so that you can get higher rental rates while reducing tenant turnover. Thus, you’ll have shorter vacancies and much more stable income form the property. A little bit of expense now could pay you back in a big way down the road.