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Smart Strategies for New Rental Properties
Many of our homeowners also own and invest in new rental properties. But how do you maximise your return on the investment. In this article we offer some smart strategies to help any new investor gain a better return on the rentals in a portfolio.
Smart Strategies for New Rental Properties – How to Boost Your Return
Photo credit – Ivan S
Owning a rental property can help you build wealth with ease. However, purchasing property is just the beginning. If you want to get the most out of your investment, you need to have a solid plan. The good news is that small, smart moves that you make consistently can protect your income and grow the value of your property over time. Read on, and we will show you how to do it.
Key Upgrades to New Rental Properties That Improve Tenant Appeal and Comfort
Happy renters don’t move as much. Long-term renters mean more consistent cash flow, less turnover expenses, and fewer vacancies. There’s one simple trick to keeping your tenants happy and getting a more consistent return from your rental properties: rent should feel like home.
Upgrade Kitchen and Bathroom
If you want tenants to feel comfortable, focus your efforts here. You don’t need to remodel the whole space. Small changes can have a big impact. Upgrade outdated faucets. Replace cabinet knobs. Give everything a fresh coat of paint in a neutral color. Cost-effective? Check. Visually impactful? Double-check.
Enhance Lighting
Put some additional light fixtures in dark areas or hallways. Good lighting will instantly make your space feel cleaner and more open to tenants. When you take listing photos, good lighting will make your space more attractive to quality tenants.
Photo Credit – Ivan S
Add More Storage
Who doesn’t love storage? Whatever you can do to increase storage will please your renters. Build some shelves in closets. Add hooks by the entrance. If your rental property has space for it, include a storage unit. Little touches like these will make your space more livable and help you stand out from other rentals.
Install Smart Home Features
Smart door locks, programmable thermostats, and video doorbells are all the rage these days. Tenants will love the added convenience, and won’t mind you charging a little extra rent. Smart home features like Google Nest thermostats can also help you cut down on energy costs.
Don’t Overlook the Curb Appeal
Finally, make your property shine from the curb. Cut your bushes. Power wash your driveway. Make sure your front door looks clean and inviting. You want your renters to feel like they’re walking into someone’s home, not an apartment building. Whenever you want to sell, curb appeal is everything.
While you work on these changes, you need to be mindful of local regulations as well. Working with an experienced property manager in Northern Virginia ensures your property stays compliant with local regulations.
Cost-Effective Maintenance Practices for New Rental Properties That Protect Property Value
Neglected maintenance is one of the largest risks to rental property performance. A little water leak can turn into a major mold issue down the road. A cracked driveway can turn into a liability claim. Keeping your property in good repair will protect it and save you money.
Perform Annual Inspections
Go through your property each year to identify maintenance items. Alternatively, walk through between tenants to spot trouble spots. Look for water damage, pests, HVAC issues, roof damage, and more. Take photos to document existing issues.
Have Your HVAC Inspected Annually
Heating and cooling system repairs are some of the costliest you’ll encounter. Replace HVAC filters every 90 days and have an annual inspection. It’s an easy habit that will extend the life of your system and protect against inconvenient (expensive) failures.
Check Seals Around Windows and Doors
Air leaks are a major source of inflated energy bills. They also allow moisture into your home. Check around windows, doors, and plumbing fixtures for leaks. Re-caulk as needed. It only takes a day and will save you money on utilities and protect against water damage.
Start A Maintenance Reserve Fund
Save 1% to 2% of your property’s value each year to cover maintenance costs. On a $200,000 rental home, set aside $2,000 to $4,000 annually. That way, you’ll always have funds available to cover water heater replacements, roof repairs, and more.
Photo credit – Ivan S
Quickly Address Tenant Maintenance Requests
Not only will your tenants appreciate quick service, but you’ll protect your property from further damage. A pipe leaking for two weeks can cause exponentially more damage than one you fix the next day. Stay organized by using a free property manager app to track requests.
How To Increase the Value of Rental Properties Through Strategic Improvements
One of the most effective ways to increase rental property value is to make strategic upgrades such as modern kitchens, updated bathrooms, and durable flooring. In addition to comfort and maintenance improvements, some projects will also directly boost your rental income and/or property value.
Add An Accessory Dwelling Unit
Building a garage apartment, basement unit, or backyard cottage creates a second rental on the same property. Accessory dwelling units (ADUs) are popping up in many cities, including Houston, which has roomy lots. This improvement alone could substantially improve your total return.
Turn Wasted Space Into Livable Square Footage
Do you have an unfinished basement or attic? Maybe a covered porch? All of these can potentially be converted to rentable square footage, which means you can charge more rent, and it will boost your appraisal value. Be sure to consult your local building codes.
Go Green
Energy-efficient homes attract better tenants and can get higher rents. If it makes financial sense, consider insulation, energy-efficient windows, or solar panels. Your utility company and/or state may offer rebates that can offset the cost of these projects.
Raise Your Rent When It Makes Sense To Do So
At least once a year, compare your rental rates with those of others in your area. If yours are below market value, you can probably raise them. Doing this gradually, year after year, is less jarring for tenants than raising by several hundred dollars after keeping it the same for many years.
Document Everything
Keep records of all the improvements you make. Bonus amenities not only increase your property’s appraised value but can also help when you want to refinance or sell. They can also be useful if a tenant questions your right to charge higher rent.
Final Thoughts on Maximising Return on New Rental Properties
Successful long-term rental property investing isn’t luck. It’s making smart choices day in and day out: improving the unit to find quality tenants, maintaining the rental properties to prevent expensive problems, and upgrading strategically to build value year after year.
Further Reading
At HouseSit Match we like to share useful blogs and practical advice to help you maintain your home and property investments, such as this article on smart strategies for new rental properties. We hope you find this small selection of our blogs useful.
How a Renovated Space Becomes a Profitable Rental – Top Tips
How to make a home secure for the holidays
Housesitters keep pets safe at home and save money
