If you don’t invest enough to bring the property up to the level of the neighborhood, the property will never maximize your return.
There are many options on the market today that would make great investments, fixer uppers at steals of prices, and a bargain property! But for you to maximize your return on that investment, it’s going to take some effort. The best plan of course, is to keep renovations, repairs, and maintenance costs at a minimum while still making the property comparable for the neighborhood it’s in.
Renter’s do not have the same mindset at home buyers do. They are not looking at the age of the furnace, or the water heater, or the efficiency of the large systems in the house. Keeping that in mind when prioritizing where your investment funds go is crucial to make sure you are putting your funds in the right place and you are able to maximize your return. Of course if those systems are unsafe, or going be uncertain in the very near future, it is best to get out ahead on those types of repairs and make the upgrades so you don’t end up getting a 2AM call in the middle of the night that the furnace broke when it’s -20 degrees outside.
- Invest in the most important areas of the property!
While when purchasing homes, people often look for the best kitchen and bathrooms, that is not necessarily the case for renters. While they are still important to be clean and semi-updated, you don’t need to plan on gutting the kitchen. Leaky faucets can actually end up costing you a ton of money – having to replace the faucet, the caulk, the under cabinet… so making sure that everything is sealed, tight, and functioning smoothly goes a long way. Making small upgrades to replace fixtures, resurfacing cabinets, and a really great shower head in the bathroom can go a long way in attracting a great tenant and upgrading the home, keeping costs low and your ability to maximize your return. Stainless steel appliances are also a great upgrade that can really wow potential tenants and are almost becoming a standard, as their cost is not much higher than regular black or white appliances these days.
- Choose the right little details!
There are key details that genuinely matter when it comes to making decisions in getting your property rent ready. Potential tenants care about the colors of the home. They want to feel that it can easily fit their style and furniture and lifestyle. White can create a sterile environment, while dark colors can be limited and make spaces feel much smaller than they are if not used properly. It’s impossible to know your tenant’s style, and appeal to the masses so choosing to go warm and neutral is a great option. Don’t skimp on the trim either! A high contrast trim can make the colors pop, give a super clean modern look, and accentuate the detail given to the room. It’s worth investing in good paint for the trim that is incredibly durable as those are going to be the first areas of wear and tear. If it’s in your budget, invest in high quality paint all around. It will make the touch ups less noticeable, as high quality paint breaks down less over time, and makes for easy cleaning to avoid having to repaint as often, definitely helping you maximize your return.
- Areas you can *probably* ignore
The curb appeal is important, but it doesn’t need to look like an HGTV Dream home. Having trimmed shrubs, and green grass is really sufficient to maximize your return. The back yard, as long as it’s fenced and secure, doesn’t typically matter all that much. A sprinkler system will go a long way in protecting your lawn and making upkeep for tenants easy. As long as the mechanical systems work, there is no need to replace them with this year’s newest model. As long as the roof is safe, leak proof, and doesn’t look concerning, there is not much reason to do anything with it. Hot water heaters can usually be ignored, but they can also be tricky – sometimes just upgrading the supply valves and connections can be a great small investment. As long as there are no signs of rust or corrosion you can typically ignore the water heater. If you are trying to push a 30 year older water heater for one more year, it would probably be best to replace it. But if it’s well within its life span and functioning and looking great there is no reason to do anything with it.
Snagging a great investment property at an amazing price is a great opportunity! Just make sure you are remembering what else you are going to have to invest in to maximize your return, make sure the property is safe and comparable to others on the market so that you can maximize your rental rate.
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