As a real estate investor, you understand the importance of maintaining and increasing the value of your investment properties. By carefully managing your rental homes and making strategic renovations to increase their market value, it’s possible to maximize the returns you earn while holding the asset and eventually when you sell it.
Your property is unique, and the things you want to do to upgrade and improve it will depend on the home’s location, age, and existing condition. It also depends on your tenant pool. Short-term tenants will be looking for much different things than your long-term residents.
There are generalities that can be relied upon, however, no matter what type of property you’re renting out and where the home is located. We are exploring 5 specific ways that investor property owners can boost what they earn.
Here’s what we recommend.
1. Invest in Smart Home Technology
There’s a lot that technology has done to improve the way we lease, manage, and maintain investment properties. We would never be able to return to a time where there were no online rental payments, no self-showing technology, and no inspection software or accounting platforms. We need the tech tools that we’re using, and we’re keeping up with the way technology has moved forward.
Which brings us to smart home technology.
There’s a lot available, and you likely use some of it yourself at your own home. Smart thermostats can regulate the temperature inside of a home, based on whether anyone is there and what day it is. This saves on energy costs and consumption. Lighting can be set to timers and appliances can be programmed to turn on and off via app.
There’s a lot available in terms of security when we talk about smart home technology. Video doorbells are extremely popular and allow tenants to see who is at the front door before they open it. They can track package deliveries and record anyone who approaches the property without invitation.
Providing smart home technology is a great way to increase the value of your investment property. It will require some expenditures, but you’ll earn back whatever you have to spend to get your property modern and attractive to today’s tenants. You don’t have to do everything; take a look at what’s available and install what makes the most sense. We particularly like the smart thermostats – especially in Florida with the intense heat in the summer – and we also like video doorbells. These will be well-worth your investment.
2. Replace Carpet with Hard Surface Flooring
Carpet is dirty. That’s the opinion that most tenants have, especially if they have pets. All of the dust particles and dirt that floats through a home can get caught in carpet fibers. It’s trapped there. Pet dander and odors and even fleas can burrow into a carpet and stubbornly hold on.
This is not optimal; especially if you’re renting your property out to tenants who have allergies. Especially if you’re trying to clean it during a turnover and eager to get a new resident placed.
Replace those carpets with hard surface flooring. This will increase what your property is worth, and it will also help you attract tenants quickly when you’re renting the place out.
You don’t have to invest in expensive hardwood floors. While those will really boost what your home is worth, you can do quite well with some quality laminates. Faux wood floors look great, and they’re easy to maintain. Also affordable and durable are vinyl planks and tiles. There are a lot of options when we talk about flooring, and you’ll likely find something that fits your tastes and your budget.
If you do decide to keep carpet, make sure it’s clean. Tear it out and install new carpet whenever it starts to look too worn or faded. Leave it in the bedrooms but upgrade to the hard flooring in common areas like living rooms.
3. Update Landscaping and Improve Curb Appeal
Think about your first impression. The curb appeal of your investment property will impact what it’s worth. Take a look at how the property looks from outside. Stand on the street or the curb. Is this a home that you’d want to live in?
Some cost-effective improvements you can make to your landscaping include:
- Keeping the lawn green, mowed, and neat. Whether you have an acre of land or a small courtyard, make sure the grass looks healthy. Don’t let it get overgrown. Schedule a landscaping service, especially during the summer when the frequent rain helps the grass to grow quickly.
- Trim back tree branches. You don’t want them hitting the house or brushing up against windows. Any bushes that are growing too high should also be trimmed, not only because it’s a security issue, but also because it looks better when the greenery is cut and fresh.
- Plant some pretty flowers that are low-maintenance and bursting with color. This will make your property look inviting and welcoming, which adds to its curb appeal and its value.
Whether you’re thinking about renting your property out for the first time or inspiring tenant retention, you want to provide a home that people are proud to live in.
Another excellent way to increase what your investment property is worth is to offer landscaping services with your lease agreement. Most landlords struggle with the decision; should you take care of the landscaping or should you leave it to your residents?
Your residents likely won’t keep up with it to your standards. Instead of leaving the responsibility in their hands, hire a service to take care of this chore. Tenants will find this appealing; most people do not rent homes because they want to spend their weekends mowing the lawn, pulling weeds, and raking leaves. When you hire a lawn service, you can be sure that the landscaping looks great all year long, and you can also roll the cost of that service into your rent. You’re maintaining your home easily without spending too much out-of-pocket.
4. Allow Pets When Renting out a Home
Pets come with a bit of risk and liability. We understand why some owners do not want to allow them. However, they can increase the value of your property by attracting more tenants and bumping up what you earn. Here’s how:
- Pets reduce vacancy and turnover by keeping your tenant pool as large as possible. Read any study on pets and you’ll find that more than half the population has at least one cat or dog. When you deny tenants the privilege of moving into your home with a pet, you’re losing a huge chunk of potential applicants. Turnover is also reduced because most pet-owners will want to stay in place rather than find another pet-friendly property and pay another pet fee in a new home at the end of a lease term.
- Owners can charge a pet fee or a pet rent when renting to tenants with pets. Your pet fee is non-refundable, and you’ll collect it before a tenant moves in. If there’s excessive pet damage when that tenant moves out, you have the fee to cover it. If there’s minimal pet damage or none at all, you still keep the money that was paid. This can give you a few hundred dollars of extra income. Pet rent is also far more normalized now than it was a year ago. Charge an extra $25 to $50 per month to tenants with pets and you’ll earn more over time.
The financial benefits to allowing pets far outweigh the risk that these animals bring. Make sure you screen all pets carefully and put together a solid pet policy. Your property is worth more to you and to your tenants when you welcome pets.
5. Replace Your Windows and Make them Hurricane-Safe
Florida’s Gulf Coast is prone to hurricanes. There can also be severe tropical storms and a lot of rain, wind, and heat impacting the condition of your rental property.
Good windows are essential. If you have not updated your rental property’s windows in a while, now is the time to do it. This is good for your investment; you’ll protect it if there is a storm, and you’ll also help your tenants to feel better about moving in. Modern, double-pane windows are attractive, modern, and more energy efficient. Your residents will lose less of the cool air that runs through your property, reducing energy bills and keeping their home more comfortable.
Windows are a good investment. They’ll increase the value of your property and help your tenants have a better rental experience.
You’ll want to make improvements and offer amenities that tenants find meaningful. This is the best way to increase your property’s worth when you’re renting it out. Anything you do to increase rental value will also increase your property’s value on the sales market if you decide to sell at some point in the future.
These are some of the general improvements that always deliver great returns for our rental property owners. If you’d like us to make some customized recommendations based on your unique property, please get in touch with us at Anchor Down Real Estate & Rentals. We are always assessing the market and measuring the demands of tenants to help our owners earn as much as possible on their investment properties.
