The Most Cost Effective Improvements
When acquiring residential rental property, you should always be asking what improvements can you make that carry the greatest return on your investment. Obviously, the more attractive your property, the more attractive it will be to prospective tenants, and the more rent you can theoretically obtain. Your main concern should always be your competition, and what like rental units in your neighborhood look like, and can fetch in terms of rent.
Always ask if your property absolutely needs work. If so, what should be replaced and repaired? Upgrading a rental unit should only be done with an eye toward the incremental income to be derived from the upgrade. If yours needs work, then consider these repairs as allowing the greatest return on your property investment dollar.
Never underestimate what a little landscaping can return in terms of bringing in a better type of tenant to your building. A freshly spruced, attractive exterior will make a great first impression for any potential tenant. You want multiple applicants to be fawning over your unit. This will ensure you maximize the rent for that unit. If you can create a renter’s bidding war because of the desirability of your building, all the better.
Updating a kitchen
If your rental unit has a kitchen that’s over twenty years old, you’ll need to decide if you want a complete kitchen renovation, or something simpler. If you can get away with simpler, by all means do so. Re-sand and paint the kitchen cabinets. Change the lighting fixtures from fluorescent to track lighting. Simple laminate countertops can replace old and outdated ones. Also consider replacing the kitchen sink and faucet together for a more up-to-date look. A trip to your local home improvement store will help give you ideas for some low cost solutions.
The bathroom upgrade
A very inexpensive way to modernize the look of a bathroom is too replace only the simplest of items in it. Consider upgrading faucets, toilets, towel racks, bars and accessories first. If the bath is older than 20 years though, you’ll definitely have to consider changing out the vanity, bath tub and/or shower fixtures. In either case, make sure you coordinate any upgrade with other rental units, or, at the very least, do the kitchen and bath together in the same unit. Then, you’ll apply economies of scale when hiring a plumber to come in and do both projects concurrently.
Talking about plumbers…
As long as you’re hiring a plumber, you should also consider if your building needs any major overhauls. This might include having him check all your pipes for corrosion, as well as wear and tear on your hoses and connectors to all your appliances in the building. Having him repair and or/replace faucets and other items now, may help prevent problems down the road.
Should you replace the carpet?
If your floors are looking ragged due to worn carpeting, it most certainly is time to replace it. While carpeting represents the least expensive way of updating your flooring, it also is the quickest to wear out. Consider commercial grade carpet. Another way to go is engineered wood flooring. It will last 25 to 30 years, cleans up well and easily, and looks excellent. However, if you have old pine or oak floors under existing worn carpeting, you might also consider having them refinished. Gleaming hardwood floors are a great way to attract more upscale tenants, since they are so in demand right now. Consider replacing old, peeling kitchen tiles with newer, updated tile or linoleum, or as mentioned above, wood-engineered flooring.
Is it time for repainting?
If your interior walls are looking worse for wear, then repainting in a nice, light shade is always a good idea. Keep ceiling white, but consider off-whites and beige shades for the walls. Neutral colors always work best when renting your units. They’re also easiest to repaint when it comes time to find a new tenant and spruce up the unit. Make sure all rooms are painted the same. As for the exterior, keep the color in harmony with the neighborhood, with nothing outlandish. Remember, your building must appeal to the greatest number of potential tenants possible, in order to maximize your cash flow by keeping demand high for your units.
If you follow these most basic of investment property repairs, you will certainly keep your repair costs down, as you continue to appeal to the greatest number of tenants. And the best tenants at that. This will help keep your building in a positive cash flow for years to come.
photos courtesy of blakehomeimprovements.com, telegraph.co.uk, diynetwork.com, aglasgowskeptic.blogspot.com, apachemoving.net, bandspainting.com, roofingcontractordouglasvillega.info