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To help make these decisions easier, take a look at the following factors to consider and then apply them to other features of the property:
- The usual tenant stays in a property for 13 months, whereas a family will occupy the property for 3-5 years. So, when you repaint, you’ll have an idea of what kind of paints to use (i.e. expensive 20-year paints or cheaper ones?).
- Do you need those expensive, ornate door knobs, or will standard ones do the trick?
- Is it necessary to use costly stain-resistant carpet? Inevitably, you’ll have to replace it due to normal wear and tear and impervious stains, so stick with a cheaper carpet.
To increase your property value even more, it’s important to understand that a building can always generate more cash flow if it's split into more units, such as a house that’s converted into multiple apartments. The reason for this is that rates for these units will have a high demand, since you, as a buyer, can offer lower rates for these units than most other properties. But these “lower” rates add up. Collectively, they will form a larger sum than what you could charge one family for renting the entire house.
TIP: Upgrades will give you a lot of bargaining power if you need to raise rents. The tenants will be a lot more understanding if you take care of them.
As you can see, there are several ways to increase property value. But it’s also important to look at other factors that could influence that as well:
- What service can you fill that will make your property more desirable?
- What are your competitors doing that makes their residences or properties more valuable?
- Is there something about your property that dissuades renters? For example, maybe you don’t have an elevator in your building.
- Think about steering your advertising campaigns to a different, more youthful demographic position.
- Maybe you can offer an onsite gym; a more secure building with an onsite security guard; remove or trim trees that block out light and or a view; etc
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