Whether you’ve just bought your first investment property, or you’re on your tenth, you want to make the most of your investment(s) by making the right moves to both maintain and increase value and rental income.
As your business grows, property quality is an important factor in keeping that growth sustainable. Quality should grow with quantity. In this guide we lay out the top upgrades to increase the value of your property, keeping tenants happy, making quality tenants easier.
“Quality is more important than quantity. One home run is much better than two doubles” – Steve Jobs
The top upgrades to increase the value and rental income can be broken down into 4 categories:
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Maintenance
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Outdoor Curb Appeal
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Indoor Aesthetics and Atmosphere
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Smart Home Technology
Maintenance
When you have money set aside for property upgrades and you’re envisioning new granite countertops, hardwood floors, and a brand new bathroom, it’s easy to assume that the HVAC systems are working, the roof won’t start leaking in a year or two, and the drainage system is good enough to prevent any kind of flooding.
If tenants know that maintenance won’t be an issue in the property, they’re more likely to move in and stick around long term and reduce time spent on tenant turnovers. If you’re regularly doing routine maintenance on your property, the longer it will last and the more value it will hold.
Having an efficient and quick to respond maintenance operation is the first step in preventing what could be potential long term damages. Below is a basic checklist of things to regularly check:
LIGHTING/ELECTRICAL:
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Inspect all lighting in regular intervals
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Consider switching to eco friendly lighting options
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Lighting that has transformers, control gears or filters should be routinely checked.
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Any outdoor lighting should have cables checked for wear and tear
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Routinely check batteries in the smoke and carbon detectors or consider installing smarthome detectors
HVAC:
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Filters in HVAC systems should be checked and replaced regularly, along with the filters for washers and dryers.
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All venting systems, swimming pools, and building exterior should be maintained regularly as well.
PLUMBING:
When a new tenant is checking out a property, one of the things that’s always checked is water pressure. An appraiser also takes heavy consideration into the plumbing when assigning value to a property. Poor plumbing can be the root cause of the small yet important things like:
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Poor water pressure
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Smell of mildew in enclosed areas
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Small chips in the faucet water or discolored faucet water
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Patches of wet drywall
Luckily with upgrades to piping, most homes can undergo piping replacement without having to tear the walls apart leaving the home looking entirely post apocalyptic. An inexpensive new type of plastic piping (PEX) is being used more frequently in properties that can be run through the walls like an extension cord.
Plumbing should be inspected at least annually and investigated for potential leaks or unusual noises.
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Check for areas of potential mold growth. Mold damage leading to tenant illness has also led to some of the most expensive lawsuits.
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When maintenance emergencies take place, they should be immediately taken care of to avoid any expensive long term damage. Sometimes the definition of what is considered an emergency can get a little blurry. At Latchel, we use these guidelines to define an emergency.
We also run 24/7 emergency maintenance coordination, so your properties stay in top shape while you spend time growing your business.
Outdoor Curb Appeal
They say the way you do one thing is the way you do everything. The outside of a property is the first thing prospective tenants and buyers will see and will make lasting judgement calls based on their first impression. So, outdoor curb appeal is incredibly important. Below are the top upgrades to be mindful of in keeping curb appeal appealing.
ROOFING:
Being the most exposed to the elements, the roof can deteriorate quickly causing unwanted leaks and undesirable eye sores. Although many times its scars can be hidden by the sheer fact that most of it is out of a ground-dwellers field of sight, it still makes a difference.
In general, a new roof can recoup between 15 – 40% of the value of your property.
The average roofing replacement can cost anywhere between $316 – $1,017 depending on how much of the roof is being replaced, and what type of material is used.
If you’re looking to replace the roof entirely, you’ll probably spend around $12,000 if you go with the average asphalt roofing (the most widely used roofing material in the US). If you go with higher end materials such as wood, metal, or slate, it could go up from there.
If you want to save money on utility bills while also increasing the value of your property, consider installing solar panels. The US Department of Energy has found that adding solar panels can increase your property’s value by $15k.
SIDING:
According to a study done at Remodeling Magazine siding replacements and maintenance recouped 92.8 percent of its value.
Any kind of outdoor curb appeal adds high value to a home, landscaping included.
LANDSCAPING:
“The smallest patch of green to arrest the monotony of asphalt and concrete is as important to the value of real estate as streets, sewers and convenient shopping.”
– James Felt, New York Times
Landscaping may be the most aesthetically appealing part of your property, and it can be the easiest upgrade to up the property value. The industry standard is an ROI of up to 28% for properties with existing and manicured landscaping.
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