Best Ways To Increase The Value of Investment Property
There is a lot more to property investing than just buying a property. It’s important to ensure that your investment and portfolio grow over the long term and provide maximum return. To ensure this happens, there are ways to increase the value of your property after settlement. To understand how to add value to your property, we’ve provided the following tips and tricks to improve your property value!
Choose your target market.
The first method of knowing how to add value to your investment property is to understand your target market and what appeals to them. Once this is accepted and understood, every decision concerning the property should be made with this target market in mind.
For example, would your target market prefer to furnish the apartment themselves, or is it necessary to have a fully-furnished apartment before the tenant moves in? If the latter, how are you going to furnish the place in a way that might appeal to this target market? It’s also worth considering the type of lease the potential tenant might prefer.
If the property is in a suburban area and next to a school, where a young family is the target market, it might be worth offering a long term lease. If the property is in an area popular with students, renting out each room would probably be the better strategy.
But knowing the area and who is likely to be renting out your property is just the first step in understanding how to increase property value.
Keep it well-maintained
A big turn off for many potential tenants is a property that has not been well-maintained. While it may be your investment, for the tenant, that property is their home. The property must be well-maintained, which also increases its overall value.
You can manage this by addressing any issues with the property as quickly as possible. Don’t let the little things turn into big problems – get repairs underway when an issue is raised to avoid further problems down the track. Don’t want to deal with general maintenance? Not to worry: employ a property manager to take care of it for you.
Get on top of these potential problems early by conducting inspections regularly. This allows you or your property manager to find out what needs maintenance so that you can keep the property in good condition. This keeps the current tenants happy, and the property will be in great shape for the future.
Spend more money where it adds value.
While general maintenance and upkeep are essential, there may come a point where you decide to spend money to add value to the property. If this is the case, spending that money where it matters is important. Knowing what areas of the property to renovate can help you increase tenant appeal, allowing you to increase rent.
Of course, everyone is different, but generally, tenants will pay more for features like modern bathrooms, solar panels, laundry and dishwasher facilities, renovated kitchens, built-in storage options, ducted heating/air-conditioning, and outdoor entertaining areas. These are the same features that a seller might invest in to attract a buyer.
For those who own a unit or apartment, consider improvements that can be made to the entire building as a way to add value to your investment property. For example, an apartment will be more appealing if it has lift access rather than only stairs, or perhaps look at options to install communal areas such as a pool or garden.
Depending on the available options, improving the value of the whole building is a great way to increase rent and the value of your investment property.
If you are going to spend some money renovating to increase the value of your property, updating the bathroom and kitchen should be the first on the to-do list. You don’t need to spend a fortune here either.
In the kitchen, consider replacing the doors/door handles, fixing rusty or leaking taps, and even a new benchtop if the current one looks like it’s seen some use. It’s also worth giving the cupboards a good clean, or even a fresh coat of paint.
The bathroom might require a little more work. Nothing is more of a turn off for tenants than a bathroom that looks like it needs some work. So it’s vital to make everything look as clean and inviting as possible. Clean out the grime, rust, and any toilet/bath stains. If that doesn’t work, consider replacements or resurfacing.
Update older and outdated systems
As well as maintenance and renovations, it is worth updating some of the older and more outdated parts of the property. Rental properties that appear older and outdated can reduce tenant appeal, which may force you to reduce rent.
There are various ways to make sure your investment property is kept looking new and fresh for prospective tenants. These include (but are not limited to) giving the wall a new coat of paint, putting in new flooring or replacing the carpet, installing new blinds and curtains, and updating things like door handles, lights, etc.
Increase The Living Space
Another big part of knowing how to add value to your home is increasing the property’s living space. While requiring a bit more planning and effort than replacing a leaky tap, this one can be a game-changer.
Reconfiguring the internal layout of smaller properties can help enhance the value of your property. This may involve knocking down particular walls to increase room size, to create a more open layout, or even adding additional rooms.
Again, this involves knowing your target market. Do your potential tenants require an extra bedroom? Would they prefer one big bedroom instead of two smaller ones? Maybe a study or an additional bathroom?
Something as simple as creating a walk-in pantry can become a very appealing factor for specific tenants. Don’t underestimate what a more oversized bedroom or living space can do to enhance the value of your investment property!
And there you have it – just a couple of tips on how to increase the value of your house! Remember, keeping the property up to date and well-maintained will ensure the current tenants won’t want to go anywhere, and future tenants won’t be hard to come by.