Rental property owners are always looking for ways to maximize their cash flow and increase the return on their investment. Of course, there are the essentials you’ll want to take care of first, like landscaping, good lighting, and touching up paint. But you will need to take some extra steps to attract higher-quality tenants and increase rental income. In this post, we want to provide you with some creative tips to increase a property’s value and ultimately your return.
Understanding the Rental Property Market
In order to get a better understanding of the real estate market in a particular area, you should take a look at the demographics on it. This will help you get a better understanding of the renters in the area, and you may also be able to take advantage of a trend to increase your profits. For example, if you know that the population in a certain market will continue to grow, then you can assume it will be good for a rental property investment. You should also take nationwide economic trends into account before making any bigger financial decisions, as these can affect investments across the board.
#1: Enhance Curb Appeal
You can kick off the transformation process by showing some love to the exterior of your property. After all, it’s usually the first thing buyers and potential renters look at with a home. One easy way to spruce up a home’s exterior is by adding lighting in strategic locations to brighten up the entire yard. You can also make a neglected driveway look brand new by adding a fresh coast of sealant.
#2: Maximize Space and Layouts
You can make the rooms in a home feel bigger by utilizing the available space with efficient floor plans. It might even be worth making renovations to increase the floor space of a particular room, or convert it to an open layout. With the growing popularity of work-from-home and hybrid schedule careers, it may be good to include a flexible space that can easily be converted into a makeshift home office or serve a different purpose.
#3: Renovations and Upgrades
Making renovations is the most straightforward way to increase the value of rental units. Typically, you will want to focus on high-traffic areas like the kitchens, bathrooms, and living rooms. One creative way to update a rental property is by replacing older windows. It can have a big impact on the look of a home while also potentially saving you money on heating and cooling.
#4: Energy Efficiency and Sustainability
There has been a growing trend towards greener homes that focus on efficiency and sustainability. The best time to incorporate these features is when building a new property, but you can also apply some of these concepts to increase the appeal of a rental. Aside from using energy-efficient lighting and appliances, you can invest in low-flow toilets, showerheads, and faucets or replace older insulation with more eco-friendly variants. Many of these features can increase property value while also reducing your monthly maintenance costs.
#5: Smart Home Integration
Another growing trend in real estate is incorporating smart home technology to modernize a property. You’re likely familiar with doorbell cameras already, but there are also other features you can add such as smart locks, or smart thermostats to save energy. You can also install a voice recognizing home assistant to control all the other smart devices.
#6: Offer Unique Amenities
Adding amenities that allow your property to stand out from the crowd will help attract renters that are willing to pay more. For some more unique ideas, consider renovating an outdoor space to encourage use or adding a private deck or balcony to an existing property. With a multifamily property, a rooftop garden is a great communal space that can be used by all tenants if space permits.
#7: Target the Right Tenant Market
It can help to have an idea of the perfect tenants in your mind so that you can know how to tailor your marketing efforts. Set your criteria beforehand, and be sure to run thorough tenant screening when filling vacancies. Waiting to find the right tenants can be beneficial as it means they will have less issues reliably paying rent and be more likely to stay at the property for longer periods of time.
#8: Leverage Social Media for Marketing
Great marketing helps drum up demand for a property which can lead to higher rental pricing. After listing your property on the MLS, you should utilize social media and other online channels. Real estate and rental groups on Facebook can be a great place to list your property and get viewed by more people. Besides that, you may also want to post on other classified listings sites like Craigslist or apartments.com.
The easiest way to save on a real estate investment is to find a trusted lender that can get you the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. RCN Capital also has flexible and competitive loan options available. Are you looking to purchase or refinance a long-term rental property? Connect with us today.