Upgrading Your Rental Property

Posted by Teresa on June 24, 2009 under Landlord Tips | Be the First to Comment

You purchased your rental properties in order to make a profit, right? And, you’re protecting those invested dollars by keeping your properties in great condition. But to leverage the properties for maximum profit, you need to upgrade periodically, as well.

When considering upgrades to your rental units, don’t look at them as expenses; upgrades can potentially earn you several times their expense in profits. Just be sure to compare the cost of the upgrade with the amount of increased rent to see how long that will take.

If you’re considering upgrades, here are some guidelines to help you increase the value—and therefore, the monthly rent—of your investment property:

1. Maximize the view: If you can add a window to reveal a mountain, water, park, or forest view, do so! Your unit will instantly increase in value.

2. Increase storage: Tenants love closet space, built-in shelves, and built-in bookcases. Fill in dead space areas with additional storage and watch tenants fall in love.

3. Find outdoor living space: Add a patio or deck to give your tenants the outdoor living areas that everyone wants now.

4. Upgrade fixtures: Look at your rental property through a tenant’s eyes: are the light fixtures and switch plates tired and outdated? Faucets chipped and tarnished? Carpet stained and out of style? Adding fresh carpets, tile, molding, and paint will delight potential tenants.

5. Increase energy efficiency: Keep tenants toasty warm and maximize curb appeal by upgrading windows and patio doors. French doors and new windows instantly increase value.

6. Let there be light: The amount of natural light directly affects the value of your rental unit. If you enlarge or add windows or skylights to bring in more light, you will increase value; therefore, you can increase the rent and see a return on your investment.

7. Replace worn out appliances: A new dishwasher or a microwave/exhaust hood combination are simple upgrades that don’t cost thousands of dollars—and are seen as a real treat by prospective tenants.

Remember, if you want high-quality tenants, you must give them what they’re looking for. If they want a nice place for their family to live, they will pay a premium for it. Spending money now will increase your income and cash flow in the future!