Simple Hacks to Boost the Value of Your Rental Property

There are two legal ways to increase your wealth:

• Keep more of what you have (e.g., tax strategies, rehab efficiencies, expense reductions, cost savings)
• Add value to something (e.g., a real estate investment, stocks, bonds)

Let’s focus on those hacks that will specifically add value to your real estate investments.

The most obvious is certainly those things that will bring your property back up to standards.  We have to do the obvious things such as:

• Ensure there are no plumbing leaks and the entire plumbing system is in good working order, including potable water and sewage/septic and water heater.
• Ensure the electrical system is safe and working.  This may require an upgrade.  This includes all outlets, breakers, heat and AC.
• There can be no leaks in the roof!  Obvious, but sometimes this is hard to determine if it isn’t a rainy season.  You might have to take a garden hose to the roof to be sure.  Station someone in the attic with a flashlight.
• Get rid of any rotted wood or termite damage, repair walls, etc.

Those items I’ve listed, and others like it, are no-brainers.  But how do we do things that really add perceived value?  We make it pretty!

• We paint all walls and ceilings (usually bright white)
• We replace flooring, or if there is acceptable carpet or tile, we professionally clean and restore it.
• We hang mini blinds on the windows.
• We trim trees and bushes, paint the outside and make the exterior look fresh.

Now, to get the property sold, or to get it rented immediately, there are specific things you can do that really make a difference (notice the emphasis on kitchen and bathrooms!):

• Replace or refinish the kitchen cabinets, sink and counter top.
• Replace the toilet, vanity, and resurface or replace the tub.

What if you want to really make your property stand out on the market?  What if you want there to be no question as to what a great house this is in the buyer/renter’s mind?  What if you want top dollar?  Try these inexpensive upgrades!

EXTERIOR

• Put a decorative fence in front.  Plant some shrubs along the front of the house with attractive landscaping, add bark around it for color
• Replace the front windows with something new, more attractive.
• Install lighting along the walkway
• Plant a tree
• Install a new mailbox
• Build a deck in the back
• Increase the exterior lighting.  Motion sensor lights are a nice touch.

INTERIOR

• Install a security system.  Sometimes the system is installed free with a year’s monitoring.  Make the first year of free monitoring (prepaid by you) a selling point.
• Install a garage door opener
• Install a used hot tub.  You might be surprised the amount of folks who no longer want their hot tub!
• Include a microwave.
• Buy new appliances.  Kind of expensive, but a deal maker.  Try making this an incentive for a full price offer.
• Lay ceramic tile instead of vinyl.
• Go with snap-and-lock hardwood flooring instead of carpet especially in a great or living room.
• Upgrade the faucets to something sleek and modern.  There are hundreds to choose from.  Go with an extra large sink.
• Replace the cabinet and drawer hardware to something extra fancy.  This can make an average kitchen pop for little extra cost!
• Add ceiling fans instead of just new overhead lighting fixtures.
• Add chair rail molding in the dining and living rooms.
• Buy the attractive switch and outlet covers instead of the basic contractor grade covers.

We, as investors, need to make the rehab fit our strategies.  If we want to rent the property, you probably won’t add as many upgrades but you still want it attractive enough to attract good tenants and higher rents.  If you are looking to sell and you need to get that property noticed, you should add as many of the upgrades as possible within your budget, especially the visual upgrades.

I hope this brief list has got you thinking creatively about how can pump up the value of your next project!

Bill Manassero is the founder/top dog at “The Old Dawg’s REI Network,” a blog, newsletter and podcast for seniors and retirees, that teaches the art of real estate investing. His personal real estate investing goal, which will be chronicled at olddawgsreinetwork.com, is to own/control 1,000 units/doors in the next 6 years. Prior to that, Bill and his family lived in Haiti for 11 years as missionaries serving orphaned, abandoned and at risk children.