If you’ve made the decision to acquire a rental property, then you probably already know the challenges that come along with finding a suitable tenant, especially if you want to make a healthy return on your investment.
But if you want a quality tenant that pays their rent on time and respects the lease terms, then you’ll want to raise the quality of your property with some upgrades. Sure, you can use tenant screening to weed out the least suitable candidates, but you may not get the caliber of applicants you’re aiming for in the first place if you don’t have a property worth living in by their standards.
Luckily, that doesn’t always mean you have to spend thousands of dollars to transform your income property into a luxury home. Ex-serviceman and now real estate investor Valentin Sechelaru of Manchester, New Hampshire, says there are some relatively easy upgrades that can add value for the tenant and to the home.
1. Bathroom vanity and lighting
Sometimes the deciding factor comes down to the bathroom. Some rental properties only have stand-up showers, which can make a property seem less attractive to those who prefer to have access to a bathtub. The process of ripping out a shower and putting in a bathtub can be quite pricey, says Valentin Sechelaru. This issue can be potentially solved by investing in a bathroom vanity area. A large mirror and a counter area with space for storage serves as a multi-purpose space.
The best thing about a bathroom vanity is that you can make one out of an old dresser. Add a fresh coat of paint and it will look good as new!
2. Invest in Simple Kitchen Upgrades
Aside from the bathroom, the kitchen is often the first place a homebuyer or potential renter will look, so make sure it’s looking and functioning at its best. Consider refinishing the cupboards or adding more storage or even a kitchen island for easier meal prep.
Swap out the old clunker of a stove for something newer and more efficient. Add a toaster, coffee maker, and microwave that are new or near-new.
3. Add New Paint
This may seem like a simple one, but adding a new coat of paint to the interior (and possibly exterior) of a rental property can increase its curb appeal. Try to stay away from colors that fit to your own tastes –you’re creating an environment that will appeal to the most tenants, reminds Valentin Sechelaru.
Use colors that look good in low light, especially if there’s limited ambient light from windows in the rental unit.
4. Swap Out The Lighting
A dark interior from incandescent bulbs may not be the most appealing to potential tenants. Instead, opt for LED lighting that is not only brighter, but also uses about 75% less energy than traditional bulbs, and also lasts a lot longer.
If the lighting is still insufficient, consider adding more lighting fixtures in key places or even larger windows that are insulated.
5. Install a Geothermal System
This method of warming a home is becoming more popular, thanks in part to the fact that it doesn’t burn fossil fuels to create energy. Instead, these systems pull heat from the earth (which is fairly constant no matter the outdoor temperature) to create an ideal indoor climate rather than relying on furnaces and baseboard heaters. The same geothermal pump can also cool a home during the hot summer months.
While the initial investment for this technology may not be cheap – systems can range up to $20,000 or more – there may be government incentives (tax credits) that help offset the initial cost. Also, take into consideration that you’ll save up to 70 percent on heating costs and up to 50 percent on cooling costs on an ongoing basis, meaning the system will eventually pay for itself.
Valentin Sechelaru’s Final Thoughts
There is a lot of competition in the rental market, both for renters and for potential tenants. With so much competition, it is vital to ensure that your property stands out.
By making small investments in upgrades, not only can your property attract tenants, it may be able to attract more long-term tenants as opposed to short-term. Valentin Sechelaru says that by having more long-term and quality tenants and less turnover, you can ensure the profitability of your investment.