Owning rental properties is an amazing way of building long-term wealth.
Firstly, you build wealth when the price of your property increases over time. Another advantage of real estate investing lies in the income you get from renting it out.
An ideal real estate investing strategy looks like this: When prices are low due to the economic cycle, you purchase underpriced properties, then increase their value by many renovations, rent them out to cover the costs, and sell them when the market is hot.
If this isn’t the game you’re playing, and you’re, for example, simply selling your home that you’ve lived in for the past few years, getting to know the tips for increasing your property’s value are still very valuable for you.
Whatever your case may be, here are 5 tips for increasing your property’s value:
Add new paint
This tip may seem obvious, but we simply can’t stress this enough. Adding new paint or changing the color of your home’s paint can entirely change the way your home looks and thus increase its value. The reason why we’re also putting this as the first tip is that it is a reasonably low-cost renovation that any homeowner can do.
Make your property more energy efficient
Energy conservation features can have a significant impact on a home’s value, especially in places that experience extreme heat or cold. Energy-efficient homes, in general, are nowadays a big trend since everyone wants to save more money on energy.
Consider enhanced attic insulation, LED lighting, double-paned windows, and efficient appliances as a way to increase your property’s value and attract energy-conscious buyers.
If you’re willing to invest even more money, we recommend installing solar panels on the roof. Solar panels, by definition, increase perceived property value. However, since solar panels are a big financial and structural commitment, they only make sense if you hope to increase the value of your property in the long term. (Installing solar panels isn’t a quick boost in resale value if you’re, for example, quickly reselling houses.)
In terms of installing all of the mentioned improvements, we recommend scheduling an assessment with a certified energy auditor to determine where your home is wasting energy and which upgrades make the most sense financially.
The bigger, the better
Square footage has a tremendous impact on the perceived value of your home, thus adding more square footage is the way to go when you want to increase your property’s value. Adding a room is a way to go here, but that’s not the only way you can take. Creating additional living space by finishing the basement or building a deck is also possible.
Change or add windows or doors
Not only does this improve the aesthetics of the home, but it can reduce the noise inside the home as well and increase natural light inside the home. For instance, French doors that lead out to the backyard add elegance, allow more light to enter your living room, and open up more space. This, of course, increases the perceived value of your property right at first glance.
Properly positioned doors and windows can help highlight beautiful views or minimize one that is not so desirable, such as a view right into your neighbor's window.
Renovate bathroom or kitchen
It is generally known that these two rooms are one of the most crucial parts of your property’s interior that play a huge role in its value. Many people who resell houses in a shorter period of time (a matter of months/ years) often increase the value of their purchased properties by renovating the bath or the kitchen.
This includes changing a portion of the room but not necessarily a renovation of the entire room. It could, for instance, mean changing the countertops or the flooring.
For inspiration: In the kitchen, you could buy newer appliances, and in the bathroom, you could switch out a toilet or a bathtub.
Upgrade your garden
The perceived value of a property primarily depends on two factors:
Rock-solid statistics: By this, we mean all the statistics about the property such as location, square footage, etc. However, there is also another driver of people’s decisions which is the first impression they get about a property, which leads us to the next factor.
First impression matters: The value of your property will obviously depend mostly on the above-mentioned rock-solid statistics, but that doesn’t mean aesthetics don’t matter. Your garden can be one of the ways you could increase your property’s value since it’s one of the first things people will see and notice while viewing the property. This is why we know it is worth investing money into it.
One thing we want to emphasize is that while you do want to improve your property and increase the value, you also want to be cautious so that you don’t over-improve your property. If you spend more money on the renovation than it gets you in property value, it’s simply not worth doing.
Before you start your renovation, make sure to do in-depth research on your area to find out how much the property will be worth after the renovations. This is also known as the After-Repair-Value or ARV.
Once you’ve done your due diligence, you can deduct the price you paid for the home and what you are left with is the maximum price you should spend for the renovation and any related costs.
Contact us today at www.RentBottomLine.com to see how we can assist you with your property.