By Joseph Edgar (Aug 15, 2019)
There are smart ways to improve the value and marketability of your rental property, and maybe even find that dream tenant. It doesn’t have to cost a lot, either. It doesn’t matter where a property is located, what the local market is like or what average rents are. With a few simple changes, even the most stagnant rental property can be improved upon.
Here are the five ways to boost the performance of a rental property and add to its overall value, without breaking the bank.
1. Go as green as you can.
Improving the energy efficiency of your property can do more than just cut down on your monthly utility bills. It can also boost the value of the home. With some simple, energy-focused upgrades — like additional insulation, energy-efficient light bulbs and shower fixtures, or even new windows — you can make a major difference in the performance of an older rental.
According to a 2018 study, upgraded homes in southern California tend to sell for an average of 9% more than their less-efficient neighbors. This mirrors findings of similar studies, including a report by Earth Advantage Institute that found that Energy Star homes around Seattle sell for as much as 8% more than less-efficient alternatives. Similarly, efficient homes in and around Boise, Idaho, command a 4.5% premium.
These trends carry over to the rental market as well, with tenants increasingly considering the energy efficiency of a potential rental when deciding whether or not to move in. It makes sense — the more energy-efficient the unit or home is, the less they’ll have to pay for their monthly utilities.
2. Lean into the neighborhood.
Location, location, location is a real estate cliché for a reason, but it’s not something that can be changed after the fact. You’re either located in a hot spot, or you’re not. But that doesn’t mean that even the most isolated, undesirable rental location doesn’t have its charms. Consider assembling a list of nearby amenities, activities and destinations, and include it in the rental description. Or think about what alternative transportation options, like rental scooters and bike share, might mean for your location. It might not be located as far away from the hot spots as you think.
3. Up the curb appeal.
It’s amazing the impact that a few carefully placed shrubs and a new coat of paint can have on a rental property. The truth is, curb appeal matters almost as much as location when it comes to rental property, and today’s tenants are looking for homes that don’t necessarily look like rentals. Inexpensive fixes like fresh flowers, neat landscaping and on-trend paint colors can fix up an older rental and make it look just as nice as the new build down the street.
4. Tighten up the kitchen.
There’s a difference between the kind of kitchen remodel job a homeowner would do for themselves and the lower-cost steps that a landlord can take to modernize a kitchen in a rental property. Things like giving cabinets a fresh coat of paint, upgrading the light fixtures, swapping out the door handles and even upgrading the countertops to granite — which costs more to install than laminate but will last far longer — are all simple and effective ways to make a kitchen pop. And those are details that renters will appreciate when looking for a new home.
5. Play up affordability.
Given the fact that so many millennials are saddled with student loan debt and other commitments, landlords who can offer affordable rental options without sacrificing quality will be in demand. Everyone from young people looking for that first job to those deciding to relocate will start their home searches based on affordability. One good starting point is the Single Family Rental Industry Report 2018, on which my firm and others partnered with the National Landlord Association, which tracks the lowest average rents by state so you can see how you measure up based on your local market.
It’s true that we’re living in a golden age for landlords, but not all rental properties are the same. Fortunately, with just a few simple fixes, any rental can be brought up to modern standards to attract today’s tenants, and it probably won’t cost as much as you think.
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