7+ Ways to Increase Property Value
As an investor, you know that renting units to obtain cash flow is only half the battle. The other half? Increasing property value. When it comes to obtaining higher rents and eventually selling your investment property, it is crucial to update, remodel and renovate! Below are 9 ideas to hike up your rents and sell for more:
1. Energy Efficient Updates
Whether you or the tenant pays utilities, it is beneficial to switch to energy-efficient energy. Switching from electric heating to natural gas can lower the cost of utilities immensely. When it comes to selling the property in the future, investors will see the value in low operating costs.
One of the most inexpensive ways to increase rents for tenants, and in turn, increase property value, is to paint the interior units. A fresh coat of paint looks attractive to prospective tenants and can be done for very low cost.
Leaky plumbing fixtures such as sink faucets and shower heads or toilets that keep running not only look unappealing, but they increase utility bills too. Fixing or switching out old faucets and hardware will keep current tenants happy and attract new ones.
Replacing old carpet or linoleum flooring is a great way to boost property value. Switching to flooring such as tile, vinyl plank or even some laminates can not only make the unit more modern, but can make cleaning and maintenance easier and less expensive.
Consider doing minor cosmetic renovations in the kitchen and bathrooms to increase rents and property value. Typically, these two items have the best return on investment but can be costly - be careful not to over-do it. Sticking with neutral and functional cabinetry, sinks and appliances is best.
6. Security System
A security system is a bonus to many tenants, even in safer areas of your city. Cameras and an alarm system can add a sense of safety for your potential tenants. In addition to benefiting your tenants, cameras or alarms can add security for the landlord in case of property damage, theft, break ins or even fires. Fast alerts to first responders in the case of fire can reduce the risk of property damage.
Storage, storage, storage! One of the largest considerations for tenants when choosing an apartment is whether it has the capacity to fit all of their things. Make use of tall cabinets all the way to the ceiling in the kitchen. Add shelving in closets and the bathroom to make better use of vertical space. Additionally, if your rental property has a yard, a great solution for lack of storage is to purchase small sheds that can be designated for each unit.
Laundry is a huge bonus for many tenants. The hassle of taking laundry to a laundromat alone can be enough to deter tenant from choosing your property. In larger buildings, consider installing a coin-operated laundry room with secure access. In smaller apartments without a common area, consider installing an apartment sized stack-able washer and dryer (especially if tenants pay their own utilities).
Unlike an owner-occupied home, landscape on rental properties should be clean, simple and require little maintenance. Avoid plants that require regular watering. Instead, choose perennials and annuals that return every year without constant care. If you choose to plant trees, consider placing them in areas that block direct sunlight through windows to save on air conditioning costs in the summer.