How to Get the Best Out of Your Investment Property
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How to Get the Best Out of Your Investment Property
Having a rental property is a lucrative investment as it can serve as a steady source of income while allowing you to build equity. However, to reap these benefits one needs to ensure that the property is consistently occupied by tenants. In this article, we discuss various ways through which you can make your property stand out and have a profitable investment.
Research Your Competition
A quick search on property listing sites will provide you with a good idea of what you’re up against. Try to notice any trends among your competitors, such as making their large bedrooms the selling point. Additionally, pay close attention to the rents they are charging.
When it comes to your listing, focus on emphasizing the positives of your property, which can be a large lawn, appliances, new renovations, etc. Your aim should be to use your unique features to stand out from the crowd and attract higher inquiries. An effective way to achieve this is by uploading high-definition photographs of your property in addition to a walk-through video. Tenants who are highly impressed by your listing will place faster offers.
Make Necessary Renovations
If it has been more than five years since you’ve made renovations, it’s time to identify areas that need improvement. Additionally, if during this time the question “when should I refinance my mortgage?” has crossed your mind, then now is the perfect time to do so.
In order to afford renovations, you can opt to apply for cash-out refinancing. This type of refinancing is available to homeowners who have built equity on their property. As reported by PennyMac, through refinancing you can replace your old mortgage with a new one with lower interest rates and favorable terms. Additionally, based on your equity you are eligible for a higher mortgage amount, part of which you receive in cash, allowing you to cover the cost of the expenses.
Post-renovations you can ask for a higher price for your property and use it as a unique selling point. To get an honest assessment regarding areas that need renovations, gather inputs from your past tenants and family members. According to research, here are a few improvements that provide the highest ROI:
- Replacing Garage Door (94%)
- Minor Kitchen Remodelling (72%)
- Mid-Range Bathroom Remodelling (60%)
- Major Kitchen Remodelling (57%)
Maintain Your Property
Your job as the owner doesn’t end once renovations are complete. There can be a gap between listing your property and tenants moving in. During this period, it is imperative to keep your home in its best condition. This involves:
- Making Repairs: While tenants can be made responsible for minor repairs which are needed over time, maintenance of major systems such as plumbing, HVAC, and electrical remains your responsibility. Call the professionals to replace old air filters, remove clogs, fix leakages and replace malfunctioning switchboards.
- Landscaping: Having a neatly cut front lawn can add much-needed curb appeal to your home. You can further enhance it by planting flowers, shrubs, or trees, making your home stand out from the rest of the neighborhood.
- Reviewing Automated Systems: The US Fire Administration (USFA) recommends reviewing your smoke alarms every month. You should follow the same logic for your security systems as these could be deciding factors for tenants to choose your property. Additionally, before tenants move in, conduct a pest-control exam and take any necessary action needed.
If you do not have the time to address these issues yourself, hire a property manager. In addition to maintaining your home, you can also delegate other responsibilities such as finding tenants, conducting showings, handling contracts, and addressing complaints.
In addition to maintaining your property, you also need to sustain a good relationship with your tenants as this will encourage them to stay longer and provide you with good reviews once they complete their lease.
When it comes to handling an investment property, your focus needs to be on catering to tenant needs better than the competition and ensuring they occupy your home for a prolonged period of time.
This resource guide is just one example of the great content you can find on the Home Doctor of America website.