To succeed at real estate investing, investors must create value in a property. With successful real estate investing, negative first impressions don'...
To succeed at real estate investing,
investors must create value in a property.
With successful real estate investing, negative first impressions don't discourage an investor's enthusiasm concerning a property, and investment decisions aren't made on whether the investor likes or dislikes the property. Instead, the successful real estate investor judges the property's potential profitability, and makes a determination, based on thorough market research, whether they can spend the money to boost the value of the property perhaps by double or triple.
In this article, we'll look at eight improvements you can consider making to your income-producing property that could easily boost the value of the property and maybe get you a great return.
1. Clean the Property
Clean units attract higher-quality tenants, and investors pay more for properties with better tenants because better tenants mean lower risk, less trouble, and surer rent collections.
Rental units that aren't meticulously maintained turn off top-quality renters. They go elsewhere, and instead, those tenants willing to accept units with dirt-encrusted windows and stained carpets stream in and likely treat your property like their personal pigpen.
When you display pride of ownership, you not only attract better-quality tenants, you show your tenants the degree of cleanliness you expect. Likewise, when you do plan to sell the property to another investor, a spotless unit will generally sell quicker and at a higher price.
2. Update Color Schemes, Patterns, and Fixtures
You can quickly add to the appeal of your units with modern color schemes, or special touches like chair moldings, mirrors, fancy plumbing, light fixtures, or patterned tile floors. The rule is not to go wild with creativity or personal flair, but add just the right amount of sizzle to make your units stand out from the competition.
3. Create More Usable Space
If you are able to create more usable space at your property, you will increase its value. Keep asking yourself, "How can I use or create space to enhance sales appeal or generate more income from these units?" Maybe you can convert an attic, garage, or basement to additional living area, or perhaps enclose a porch or patio, add a second story, or build an accessory apartment.
Also, consider remodeling the living area within the units so every storage and living area within the apartment is sized proportionally to market tastes and preferences. You might be able to reduce the size of large rooms by adding walls or separate areas, for example, or perhaps you can combine small rooms to make larger areas. Bear in mind, prospects are often reluctant to pay top rents or a top price when room or floor areas are perceived as "too large" or "too small".
4. Create a View
Whenever you can find properties that don't adequately capture a potential view of a lake, ocean, mountain range, city lights, or other interesting landscape, you have discovered a great way to add value to a property.
5. Capitalize on Creative Possibilities
Improvements that add value begins with creative imagination. Rather than simply slapping on a fresh coat of white paint and laying new beige wall-to-wall carpeting, think outside the box and try to imagine some creative possibilities. You might be surprised with the result of reaching beyond commonplace ideas.
6. Eliminate a Negative View
Some buildings devalue because they look out directly onto an alley, another building, or worse. If you can eliminate the negative view and convert it into something attractive, perhaps by changing the location of a window, some creative landscaping, or by adding decorative fencing, you will add value to your property.
7. Amplify Natural Light
Tenants and investors prefer properties with lots of natural light. Consider adding or enlarging windows, swapping solid doors with glass-inlaid doors, or installing skylights. Likewise, you can make the units appear larger and more spacious with lighter paint, carpet, and window treatments, or by painting over that dark brick fireplace.
8. Reduce Noise
Tenants pay a premium for quiet. Consider insulation, caulking, trees, shrubs, and soundproof windows to enhance quiet. The more you can muffle or eliminate outside (or adjoining apartment) noise, the better. In fact, before you buy a multi-unit building, test the soundproofing between units. If you can hear a television, people walking or talking, or toilets flushing, beware. Unless you can figure out a solution to the noise problem, you will hear multiple complaints and contend with high tenant turnover.
