8 Low-Cost Ways to Dramatically Increase the Value of Your Rental Property
Having a decent rental property guarantees a steady cash flow as long as you manage that property well. In fact, the biggest contributor to your cash flow is your ability to increase the perceived value of your property.
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As a landlord, you should have two goals. First and foremost, you want to make sure your property doesn’t go down in value, ever. Sure, markets fluctuate, but I’m talking about maintaining the state of the property. Then, you’ll want to increase the value of your property whenever you can and ensure your property is always rented out. Sometimes tenants leave, and that’s your opportunity to make improvements. In fact, you can easily use your previous tenants’ feedback to improve where it matters most. While it’s true that a property with modern gadgets and equipment excites tenants, there are other low cost and surefire ways of sprucing up your property for a higher rental value. These improvements will not only raise the value of your property but will also ensure that your property is attracts new tenants.
Here is a list of low-cost improvements that you can make to your property that will increase its rental value:
Before You Show the Property to Your Prospects
Perform a Makeover of the Yard & Uniform Fences
Picture this: As your prospective renters arrive to check out your property, what do they notice first? It’s the outside of your building or your front lawn. A neat and clean front lawn will help create that initial positive impression and set the mood for the remainder of the visit.
You may not have the budget for extensive landscaping work, and that’s ok. Just upgrade whatever you can so that your lawn looks tidy and presentable. Trim overgrown bushes and shrubs. Remove fallen leaves, sticks or anything that might make your lawn look cluttered.
You can even consider placing a few bushes, flowers and ground covers strategically. You can look for inspirations to upgrade your yard from landscaping websites and garden stores. A new mailbox or even just a freshly painted one can work magic. Having outdoor lights and shutters can quickly and inexpensively make the exterior of your property pop. You can even use cheap solar powered lighting posts that you can just stick in the ground.
If there’s a fence around your property, make sure it looks nice. A broken fence or missing pickets are something no tenant would like to see. Ensure your fence is uniform and looks cohesive. Here too a fresh layer of paint might do the trick but is of course more expensive.
Give the Place a Fine Scrubbing
Painting the whole of exterior and interior of your property will cost you dearly. You’ll have to buy paint to cover your building, fences and garage. If you don’t have the funds to cover everything with a fresh coat of paint, a thorough scrubbing and cleaning of your property will do. You can either get it done professionally or you can do it yourself. All you will need is a few hours of your day, a ladder, a pile of old rags, a lot of soapy solution, and a brush with an adjustable handle.
If you have some budget available to buy paint, do so. Use it to paint the areas that are more crucial and obvious. Before you enter the property, you are greeted by the front door. Make sure your front door looks welcoming and fresh. A freshly painted door gives the impression that you’ve actually renovated the house for the next tenant.
Clean the Carpet
If you give your potential tenant the feeling they’re entering a new house, it will help you with getting the rent you want. A clean carpet does exactly that. Rent a steam cleaner to clean every inch of your carpet. It’s a low-cost activity but has a high impact on the presentation of the rental. It also makes your property smell fresh.
If you have vinyl floors, cleaning might not be an issue. Of course, it will certainly help, but it’s probably not as critical as cleaning the carpets. Instead, the flooring might be damaged in certain places. This is not the kind of thing you want to skimp on. Luckily vinyl flooring is on the cheap side, so any repairs don’t have to cost you a kidney.
If you have a tiled floor, just get down on your knees and scrub the floor thoroughly. Hardwood looks new and shiny by simply waxing it. Scrubbing the floor will give a new look to your flooring. But if you’ve got chipped pieces of wood flooring or stubborn stains on your tiles, consider replacing them with new tiles. You can ask for leftover pieces from your local flooring company. They might be interested in giving you the pieces at a discount.
Inspect the Appliances
New looking, shiny and well-maintained appliances help raise the perceived value of your rental property. Make your appliances look as good as new even when they’re not new. Buy a bottle of hard surface cleaner like Windex and shine all the appliances with them. Also, malfunctioning appliances are a huge turn-off for people looking to rent. Ensure that all the appliances in your property are functioning well.
Sprucing up a rental property for a new tenant is an all-important exercise for every landlord. However, if you’re thinking about spending money on your rental property, don’t be wasteful. Every single penny you spend will eat into your ROI. For most of the tenants, new appliances (or new looking) and clean washrooms are the top priorities. So, if you’re thinking about renovating your property for rental purposes, do not ignore these parts. Focus on increasing appearances of cleanliness in your washroom. Tenants appreciate a modern-looking, clean and bright washroom. Similarly, invest in well-maintained and new-looking appliances.
Also, make changes in your property according to the surrounding market. For example, turning a house into a semi-mansion located in a slum area will probably not attract the right tenants. It will cost you more than what it’ll be rented for. Make sure to NEVER overcapitalize with the improvements you do.
When Your Prospects Visit Your Property
We talked about what you can do to increase the appeal of your rental property so that you can demand a higher rent. These all are practically meaningless if you are not at your best when you invite your prospects over to inspect your property. There are a few important best practices that will maximize whatever you can ask for your property.
Create Higher Demand
A simple law of economics says that a commodity demands higher value when its demand goes up. If you apply the same rule when you’re showing your property to your prospects, you might be able to demand a higher rent. This means that if possible, invite all your prospects to inspect the house at nearly the same time. When the prospects see a huge demand for your property, they’ll obviously be more inclined to pay a premium. They’ll also feel as if they want it more than they would otherwise. It’s human nature. You can put an advertisement in a newspaper and wait for a week so that you have enough inquiries from your prospects. After a week, request all of them to turn up at a designated time.
This has a second advantage. You might even be able to pick your preferred tenant. We all know not all tenants are made equal. Well, here’s your chance to make sure you picked the best available.
Have the Necessary Papers Ready
When a number of prospective tenants show up together, it will be difficult to remember all of them. Don’t get overwhelmed. Instead, have some forms and applications handy so you can ask each of them to fill in their necessary details and employment information. You can later use these forms to select your tenant and eliminate the others.
Lease contracts set the rules for a healthy relationship between a tenant and a landlord. Contracts are legal documents that pen down the rules that both the parties agree to follow. Make sure that your tenant has thoroughly read your contract and has understood each point clearly. In the long run, a point that’s not well understood might lead to a bad relationship between you and your tenant. Make a point of it to discuss the most crucial points.
An unresponsive landlord is the last thing a tenant would wish to have. Be available for your tenants and respond promptly to their calls or mails. This starts when they’ve come to check out your property. Being unresponsive to questions can leave a bad impression. Do your best to assure your tenant that you care for them.
You can follow the guidelines outlined above even if you hire a property manager and don’t self manage. I suggest quizzing them with these 12 tips to see if they genuinely look at ways to save investors money while at the same time satisfying tenant needs.
Investors: What items do you always upgrade in your rentals for maximum value add?
Let me know with a comment!