A few years down the road and your rental properties will naturally show the wear and tear due to regular usage which is why they need to be updated every so often. Worn out looking interiors and out-of-date fixtures will cause your investment properties to lose worth, decrease in general attractiveness, and probably need that you lower the rent to draw in new residents.
As you’re busy trying to keep up property worth and earn a reasonable financial gain via rent every month, it’s vital to settle on the proper time to update your Fremont rental homes. As a rule of thumb, every few years you ought to consider replacing carpets, repainting walls, change appliances, etc. Once you cover the basic updates, what about the more extensive upgrades? Whereas adding granite countertops, two-tone paint, or hardwood flooring might sound like the best if you want to start attracting higher residents and add price to your property, you would need to ask yourself if they’re well worth the price.
When it comes to upgrading your rental property, there are both pros and cons to doing so. Comparing the benefits and potential drawbacks can help make your decision of whether or not to upgrade a much easier one.
Based on your market, once these renovations are complete, you ought to also be able to raise the rent on an upgraded rental home. Potential residents perceive that if they want an upgraded home, then they’re going to pay a lot of for its quality and are typically willing to do so. Residents interested in upgraded homes are a lot more seemingly to better care for them, enhancing the long-term profitableness of your rental properties.
As a bonus, upgrades using quality materials can increase the overall value and extend the life of your rental properties. Higher quality materials tend to last longer, offering long-lasting value and return on your investment.
Upgrades are all about value. The biggest mistake would be to overspend on a renovation and not be able to recoup the cost associated with doing so, and this is perhaps the top potential drawback that concerns most homeowners. Because upgrades will need cash up front, you will need to make sure that you have enough funds to cover the cost of home improvements while waiting for the eventual return.
One other potential downside to upgrading your rental property is raising your rent too high that you risk pricing yourself out of your market. If you want to upgrade to increase your rent, study your competition and the market that you are in first. Look at the comparable properties in your area to know whether or not your price would still be competitive after upgrading.
Finally, it’s important to understand that not all upgrades will increase the value or demand for your Fremont property. Taking the time to figure out what to upgrade and what to leave as-is can help you avoid this costly mistake.
Unless you are confident that a retro-style rental house is what potential residents are looking for, having a plan to upgrade your rental homes may be part of a smart strategy to keep your rentals competitive.
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