If you are new to investing in property, one of the most important lessons you can ever learn is when to spend money to fix up a property and when to simply “let it go”. When you are selling a property, it’s really not that difficult to figure out. If you put $10,000 into upgrades and in turn you can count on bringing in an additional $30,000 to the sale price, this is a no-brainer. With investors that are renting out their property though, it can be a bit trickier than meets the eye.
If you are an investor, what “you like” does not matter. Picking the things that will be most widely viewed by the largest number of people as valuable is what you want to focus on.
It’s simple economics. As an owner of an investment property, your sole job is to keep your return on investment as high as possible. Don’t over do it on things that won’t be deemed as valuable by prospective renters. Focus on the core things a renter will most likely be focused on. If you do this, you will be able to justify setting a higher rental amount for your investment property.
Work With A Local Real Estate Professional
Interestingly enough, upgrades to properties are not a universal thing. What is popular in one marketplace may not be in another. To those ends, a good local Real Estate professional will be able to help you pinpoint the items that will not only give you the highest return on investment, but also be the most attractive to potential renters in your marketplace.
The “Go To” Upgrades
Even though upgrades can be somewhat regional, there are a few basic factors that apply to every marketplace and will command you the highest return on investment and perceived value:
- Curb Appeal – A clean yard, weed free, with a nice green lawn will definitely give a renter a good impression of the property, making your higher rental price more acceptable in their minds.
- Open Bright And Airy- Opening up the feel of your home by focusing on making sure your windows are clean and all the lighting fixtures work throughout your property will put potential renters at ease in your property, giving them a better impression of it.
- Remember the infrastructure- One of the most annoying things about any home can be if the basics don’t work. Additionally, one of the highest return on investment activities you can undertake is simply upgrading the electrical and plumbing in your investment property. Updating these things will also make your life easier down the road as you won’t have calls from your tenants, upset because the plumbing is broken, or the power keeps going out.
Being a landlord and setting up your investment property so you get the highest return on your investment, while at the same time giving it the highest perceived value to potential renters can be a little tricky. But if you take it slow, in a realistic manner, and work with a local Real Estate professional to guide you through the process, you cannot go wrong.
