Real Estate Investor · Sacramento, CA · Member since 2011 · 12 posts · 1 vote
What are some of the best upgrades to make on a rental property in order to increase rent? Our unit is in the worst shape of all 4 and therefore is rented for the least in the complex. This is our first rental and it is hard to not get excited about making it nice. I need some advice about what makes sense when upgrading. Thanks in advance!
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
11y
I think you're seeing some of the patterns here and I will pile on as well.
Here is what I would do to get the most bang for your buck. Paint is first. Hit the trim too. Do a nice neutral tan or gray with white trim and the thing will pop. New electrical devices and plate covers (switches, outlets, etc). New $5 white blinds. Light fixtures.
Then I'm a big believer in two things: 1) Fix the worst features in the house to turn the biggest negative into a positive. 2) Over-upgrade at least one or two items - no matter how minor - so something in the house POPS! It can be a couple really nice ceiling fans. A granite top in one of the vanities. A really nice tiled in bath/shower. Maybe some crown moulding in the master bedroom and entry room (livingrm or family rm depending on the house). A backsplash in the kitchen.
Not saying do all of that. But depending on the house, do one or two of those. When I'm showing houses and I can have those 2 items in the house to really sell it, my close rate is 10 times better than when the house has nothing special in it. It may be very nice but having one or two features above their expectations can really bring the rest of the house up significantly.
I personally like having one feature in the entry room and one in the kitchen if I can. Those are really the two rooms that people notice. First impression when they walk in. And the kitchen.
And I know that people say that bathrooms and kitchens sell homes and that applies to rentals too. But I haven't gotten anywhere near the positive feedback on the bathroom stuff I've done compared to the kitchen stuff. So I would always say kitchen first.
Maybe some updated countertops. If you get the in-stock laminate and your contractor knows how to make the cuts, its not very expensive at all. But it can really bring your kitchen up quite a bit if you have some dated countertops in there today.
btw: I agree with some of the posts on that one rental. Wow. Looks like a model home there. Well done. And I bet you have an incredibly high occupancy rate on your homes too.
That is the one lesson I think we all learn quickly. Don't be cheap with rentals. You're not saving yourself money. Cheap/poorly rehabbed rentals are going to have high turnover. And turnover is the root of all evil when it comes to buy/hold investing.
Make it right. Don't make it new (or you'll go broke) :-). But make it right. And if you can make it look like @Hilary Tuttle did there - do it. You'll get your money back and then some in the long run.....
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
15y
You need to have a look in the other units. Its very, very easy to get carried away and spend month that produces no return. It may well be just a little sprucing up would make your unit comparable. Could be the previous owner just wasn't aggressive enough in setting rent and under-priced the unit.
Real Estate Investor · Sacramento, CA · Member since 2011 · 12 posts · 1 vote
15y
Thanks Jon. I know that one of the units has been fixed up immaculately but the other two are nothing special. I am thinking new flooring and paint and some minor upgrades to the kitchen should do the trick. Our plan is to use the profits from this year (as there are renters through this year) to make the upgrades and then, hopefully, get the higher rent the area commands!
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
15y
you never know what someone might like, but in general it's the kitchen and bathroom.
i have a hideous knotty pine paneling in the basement and everyone loved it. i can't stand looking at it. the garage is amazing and i drool looking it at because i dont have something that nice, yet people are like "it's ok"... so, you never know and you can just ask around and see what the majority wants/needs.
Real Estate Investor · Cincinnati, OH · Member since 2011 · 119 posts · 59 votes
15y
You can spruce things up by doing a quick coat of paint, update the flooring (nothing too fancy) and then do little things like new faucets, door handles, lighting fixtures. Look at what you need and you don't have to do everything all at once. Most importantly, people like a clean place, if you don't have the time, just hire someone to clean it all up so it's spotless.
Real Estate Investor · College Station, TX · Member since 2011 · 105 posts · 18 votes
15y
Paint and caulk have to be the best bang for the buck if you are doing it yourself.
New outlet and switch plate covers are probably the next best bang for the buck if they are showing age.
I personally like upgrading light fixtures to a matching style. You can get contractor packs of booby lights that will spruce a place up for not much money and they are easy to put up. Best thing about them is they will still look nice in five or ten years since they dont show physical signs of use.
Updated and matching bathroom hardware is fairly cheap and easy to do.
New door knobs are easy, cheap, and will go nice with a fresh coat of paint.
Tile floors are another place that if you can do them yourself will pay dividends with time.
I stay away from ceiling fans, microwaves, garbage disposals, etc because its just one more thing for them to call and complain about.
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
15y
I would go with light fixtures, vanity and toilet, counter-tops, paint, flooring, and plugs and switches. Some of these will save you money and trips to the property in the future.
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
15y
Hi Alicia,
What I would probably do is go to Craiglist and make appointments to see some of the properties that are asking for above average rent and see what they are offering. This way you will have a good starting point and it will be very specific to your market. Rental market differs from one location to another.
One thing you absolutely can not change about your property is location, so if other properties are charging higher rent because of better location, you can't do much about that.
Contractor · Member since 2010 · 14 posts · 0 votes
15y
Definitely check other units and find out what your competition is. Washer/Dryer hookups are a priority. As with SFR, kitchens and baths are important. Safe areas for kids. Good lighting outside for safety. Energy efficient appliances, windows, etc.
Homeowner · Clarksville, TN · Member since 2011 · 24 posts · 9 votes
15y
We have historical houses but we find that great curb apeal helps. We will spruce up the outside with porch swings, or rockers and some cheap annuals. We always ask about 20% more than most rentals in the area. Also we get nice appliances off craigslist.
Here is a link http://www.flickr.com/photos/54074951@N06/
We enjoy having nice curb apeal, and then we never have a problem with the property owners next door.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
15y
A lot of my rentals are out in the country--doublewide mobile homes on small acreages. I get good bang for the buck from fencing back yards and carport/storage buildings.
Real Estate Investor · Columbus, OH · Member since 2010 · 21 posts · 3 votes
15y
When I have a rental, I always stage it with dishes, flowers and nick naks. They think it is beautiful. Also, I now paint the basement walls white and the basement floors gray. A tenant picked that unit over having new carpet in another unit that did not have the paint job in the basement, just because she wanted the basement looking so clean. Now I always do that painting. Never thought about it being that important until then.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
15y
Sorry to be a contrarian, but here goes: the basic premise of this thread title is misleading, and somewhat of a fallacy. And allow me to explain.
A given unit will command a certain amount of fair market rent. That is what tenants are willing to pay. If you have a Trump Tower apartment, than you will need to have the high-end stuff (granite counters, dishwasher and fancy flooring) to be competitive with the other units that a prospective tenant will be looking at; tenants might not even give your unit a look if it is lacking in anything considered "mandatory" for that sort of unit. If you have a low-income rowhouse, then granite is probably overkill, and a dishwasher would probably be overkill in most low-income areas as well. And the wood flooring would maybe even just be painted in that low-income rental.
So would a low-income tenant be willing to pay more for hardwood flooring? Doubtful.
Granted, adding some of the amenities might get a better quality tenant interested.
Now, many of the ideas posted above are good ideas to look into, but only if the area's competing units have the feature - and then it almost becomes a "must have" for you to get a tenant.
And your repairs and improvements should be performed so that you reduce future calls for those same items (do it right, not just cheap).
One other thing to consider regarding something mentioned in a post above is properties advertised at above average rent. Just because somebody is advertising that they want a higher rent (could be a dream or wish), that does not mean that they will get it rented quickly at the higher asking rent.
Tenants can figure out what the fair rent for a place will be, since they usually look at more than one place in their search. And tenants are only willing to pay what they think is fair ...
Investor · CA · Member since 2010 · 150 posts · 40 votes
15y
Originally posted by Bryan A.:
It does depend on your market... For my area, laundry connections (washer AND dryer connections) have set me apart..
I have found this to be my very welcome addition. I spent about $200 to add Gas / Electric / Water lines in the basement for washer / dryer hookups to BOTH units (and remove Coin-Op) and immediately after that, the interests increased.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
15y
Originally posted by Steve Babiak:
I agree that interest in your properties will increase as you add amenities.
But as far as I can see, I'm still waiting for some idea that actually got an increased rent - after all, that was the title of this thread.
I had a prospective tenant ask if I'd put in a carport/storage building. I said yes I would for an additional $75 a month. I agreed and spent $3200 on the structure. They moved out after a year, but since then it has helped me rent it faster and for more than I could have without it.
Homeowner · Clarksville, TN · Member since 2011 · 24 posts · 9 votes
15y
We have not had a problem at all asking more for our rentals even though others in the area are cheaper. I swear with everyone watching HG tv they want something with a little style. The one I posted a link to a while back was an old crack house. (we call it "Ye Old Crack House" we think it gives it a little class:) We bought for 30K! But you would have been afraid to walk though it, very bad. But we did all the work ourselves and rents it for 935. It has a back unit that we have not done yet but think after rehab will rent for about the same.
Homeowner · Clarksville, TN · Member since 2011 · 24 posts · 9 votes
15y
It would rent for about 650 to 750 in the area, if it was just average.
We didnt pay that much extra for the looks becuase we get everything off of craigslist. Kitchen cost about 3k all together, that is for everything. Nashville is close to use and we buy all the upper end appliances off there. Also if you look at the kitchen all the shelving was the cheapest stuff at lowes that was damaged that we fixed, and painted. Everytime a damaged one was sitting in there we would pick it up for a few bucks, fix it and install. Also the counter tops are floor tiles. We then use our wet saw and take the 12 by 12 tiles and cut them to subway size and use as the back splash. Of course we buy everything on sale. We also take the fugly brass light fixtures from the Habitate store and spray paint them, this works great!
This sounds cheesy but paint choices do make a big splash if tasteful. I dont like the run of the mill look and never go with neutral:)
We put in about 20k to rehab this place, but we do all the work ourselves, except the heat and air. We would do that too but cant figure out how to buy it with out the HVAC permit.
We will be doing the back unit next but it takes a while since we do all the work ourselves but (now this is sad) we enjoy it!
Real Estate Investor · College Station, TX · Member since 2011 · 105 posts · 18 votes
15y
Originally posted by Steve Babiak:
But as far as I can see, I'm still waiting for some idea that actually got an increased rent - after all, that was the title of this thread.
Ill bite. I have the exact same duplex that I rent for $650 without a washer/dryer and $675 with one. A $100 craisglist W/D will bring $300 in yearly income.
These duplexes have been recently updated. The exact same duplexes one street over that have not been updated rent for $550-$575.