The popularity of real estate-related businesses has been increasing for the past several decades. Buying additional or multiple properties can increase profits.
Most people lean towards DSCR loans for these kinds of purchases because they’re the best option. The main problem here is that they have a mortgage, and they’d want to increase the rent to cover expenses and maximize profit.
In many cases, this works out well, considering rent prices today. As long as the rent covers all expenses leaving you with a few dollars extra, you are technically making profits. To make noticeable profits, you’ll need to bump the rent up.
Increasing the rent means you’ll need to add value for tenants. There are multiple ways to do that, depending on how much you’re willing to invest.
Renovations
Experts often recommend that renovating can increase the value of a property. Offering an older home without a lot of flair won’t attract too many people. Even at a lower price, you still may struggle to find tenants.
Investing in a proper makeover can help you achieve just that. Renovating the home means freshening it up, and while doing so, you increase its value. Making practical improvements allows you to increase the rent.
Some people are willing to pay more rent for little things that make their lives easier.
The renovations will depend on how much you’re willing to invest and your budget. Even if you can afford to make smaller changes, make sure they’re aimed at the popular sections most people aim for.
Renovating any property means you get to choose which parts are covered in the project. There isn’t a more or less important part when it comes to rental property, but for the most part, make sure you have the kitchen and the bathroom covered.
You should also consider the appliances and for two reasons. Older appliances are prone to breaking more often than newer ones, and with higher energy consumption, you’re not offering much to your tenants.
On the other hand, new appliances, LED lights, etc., are things any potential tenant will see as an advantage. First, they look good, and second, as energy-efficient devices, they won’t worry about high electricity bills.
Provide a Parking Space
With so many vehicles on the road and limited space, offering a parking space can be a crucial step towards increasing the value of your property.
If we’re talking about a house, the problem isn’t too big. In a worst-case scenario, you may need to consider making a driveway or a garage. Things are a bit complicated with apartments for various reasons.
The parking below the building could be occupied with no free parking spaces available. Some streets don’t allow parked cars, so you must figure something else out. Using white paint to mark a spot in front of the building isn’t what you should do.
You may need to get creative with this, as many people, whether for short-term or long-term stays, are looking for places to park their vehicles. Checking private parking in the area could be a good idea. It won’t be ideal, but at least your tenants will have a reserved parking space.
Offering them will put your property on the map, and you can increase the rent accordingly.
Make Your Property Pet-Friendly
The more you offer, the more you add value. In return, this allows you to increase the rent. Making your property pet-friendly is a good way to achieve this. With two-thirds of US households having a pet, you can understand why this “conversion” can help you increase the value of your rental property.
Contrary to popular belief, making a property pet-friendly requires no investment on your end. The only thing you’ll need to do is allow tenants who have pets.
There is a slight complication here, something you’ll want to protect yourself from. Unlike us, pets aren’t all that smart, so it’s not uncommon for them to damage some things.
This is where the agreement between you and the tenant comes into play. Any property damage is covered by the guilty party, meaning you won’t need to make unnecessary expenses.
A Common Mistake to Avoid
People start considering increasing the rent as soon as they’re done renovating or making changes around the property. Yes, you invested money, and you want to return it as soon as possible, but unfortunately, things don’t work that way.
Before you even start improving the rental property, you should consider how much you’ll invest. Once you consider this, you should research the rent prices and how much you can increase your rent. Aiming too high means people won’t be interested in your property. On the other hand, not increasing the rent enough may result in not getting a good return on investment.
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