When you own a rental property, you need to take time to make upgrades to the property so that you can attract the right tenants. Property investors who purchase property to earn rental income are enjoying the real estate market conditions. There are less vacancies than ever reported throughout the country and more prospective tenants searching for properties to rent from a smaller inventory. This means less competition when you have a vacancy and decreased marketing costs.
But you cannot just assume that you can keep your property occupied long-term because of the current tight rental market. Making renovations to your rental property is essential if you want to find quality, long-term tenants. The money you spend will increase the value of the property and the amount of the rents you can charge to potential tenants. Read on and learn how you can revitalize your investment property to attract the right tenants who care about where and how they want to live.
Previous Homeowners Still Want to Live in the Right “Home”
After the housing market bubble burst in 2007, many homeowners were forced to default on their mortgages because of skyrocketing interest rates. After they left their home, they had no option but to rent a property until they could financially rebuild. These prospective tenants are looking for properties that are well-manicured and cared for. They want a place to call home and a property that has similar features and upgrades that their home once had. If you want to attract this quality niche, home revitalization is a must.
Choosing the Right Renovations That Are Affordable and Effective
When you think of a home renovation, you might picture a demolition team on the property knocking down walls. You do not necessarily have to go to this extreme to revitalize your aged rental property. In fact, there are plenty of different renovation projects that you can take on that will not cost you a small fortune. Here are some valuable ideas on how you can freshen up your property:
Make Sure Your Property Has Curb Appeal
The first thing a prospective tenant will see is the exterior of the home. Tenants drive by properties before they even call landlords. Keep the lawn, if there is one, manicured. Make sure the walkways are clean and the building looks well-maintained. It is an amazing what a difference paint and side panelling can make.
Increasing the Appeal Inside the Home
Obviously, curb appeal is not everything. What is really going to secure an application is the interior appeal. You should walk-through the property with the mindset of a critical tenant. Think about the features that make life easier and consider installing these features. Some of these features include: air conditioning, heating, dishwashers, over-sized bathtubs, and washer & dry hook-ups. If the property is out-dated inside, you should look for a way to modernize it. New appliances, new bathroom fixtures, and even kitchen cabinetry hardware can make a huge difference.
How Much Should You Spend to Renovate?
You never want to spend more than you will be able to recoup. It is important to get a return on your investment through rental income and property value. If you are refreshing the property, you could spend a couple hundred dollars and attract tenants to fill vacancies fast. If you are doing a major overhaul, you can spend as much as $50,000, charge more for your rents, and benefit from an increase in property value. Assess how much you can afford to spend and how the renovations will make a difference. Many home-owners choose to either refinance their current loan, or borrow against their property to fund the renovation.
Australian readers have the benefit of a range of mortgage brokers (such as Smartline) who can give pretty amazing home loan rates.
If you renovate, your rental property will increase in value and you will gain taxation benefits. In addition to this, you will find quality tenants who will stay in the home for years. Decide what areas you need to tackle, plan your project when the property is vacant, and reap all of the rewards.
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