Many investors are not interested in making updates or improvements to rental properties, and who could blame them? The goal of investing in property is to make money. Any capital or rental income infused into a rental home is money out of an investor’s pocket.
It is for these reasons that when making improvements or updates to a rental home, it is very important to make sure that the return on investment (ROI) will be maximized, and paid over and over again.
Here are some simple ways to increase value:
- Add a carport
- Put on a coat of fresh paint
- Add a new front and storm door
A Humble Carport Can Yield a 100% Return!
If a rental home does not have a garage or carport, adding one will add value to the renter. When renters receive value, they pay for it.
In the case of a carport, the value that would be received would equate to a range of $60-$100 a month. Carport prices range from $150-$1,500. If a property owner invested $1,000 into an attached carport, rating $80 a month extra in rent, the result would be an extra $960 per year, or 96% ROI.
In addition to the value a carport adds, it can be converted into a garage or another room at a later date, further adding to the value of the home. The added value will increase the equity of the property, allowing the owner to extract cash through a home equity line of credit, or upon selling.
Adding Fresh Paint can add Value to a Rental Property
A fresh coat of paint can make a big difference to the appearance of a home. When dealing with a home’s exterior be sure not to purchase the cheapest paint possible. Paints vary in price for a reason, and quality is very important when it comes to a potential renter’s first impression. Additionally, do not paint the entire house the same color. Be sure to have contrasting colors on window frames and shutters to offer a more enhanced effect.
The same rules apply for the home’s interior. Renters are not necessarily thinking of the home as a rental, but a place for their family to live. With this taken into consideration it is important to know that darker, autumnal colors can have a depressive effect, especially in a hallway. Lighter and brighter colors can give a room or hallway a cleaner, airy feeling. In some cases, rooms can even appear to be larger.
In addition to making a home appear more friendly, fresh paint can serve to cover a lot of blemishes that include pin holes and fading coloration from where pictures once hung.
A New Front Door: First Impressions Last
If a home has a shabby looking front door, the result can be mixed. Many renters will not consider the front door’s appearance as important as its ability to lock and close, but given the choice of homes that offers safety, or safety and beauty, most will go for the latter.
The type of renters who are considerate of where they are going to have their family live will take it into account, if only slightly. The purpose of having a strong, attractive front door complemented with a sturdy storm door is that everyone wants to live somewhere nice, and everyone who approaches the house will do so by way of the front door.
Additionally, if the door is rated as an energy saver, a raise could be added to the rent. The home may also rent more frequently with shorter vacancy periods, and, depending on the laws enacted from year to year, a tax break could be gained, offsetting the cost of the improvement.
The point is, making improvements and updates to rental properties do not have to send a blow to an investor’s budget. Rather, they can increase it year after year.