Periodically, we recommend our clients consider upgrades to their property. These differ from repair and maintenance projects as they are not required, and increase the value of the home. And they help to improve the overall rentability of a real estate property and the amount of rent an owner can charge. We use software developed by our in-house NASA rocket scientist to determine which upgrades get the highest returns on investment (ROIs) on rental upgrades.
Replacing vs. Upgrading
Even if a tenant has lived in a rental unit for some time without issue, we recommend periodic inspections. These periodic inspections aren’t necessarily meant to “catch” a tenant in bad habits (unless they are). Inspections provide a snapshot of what may need replacing now or should be added to a list of future investments. Keeping newer appliances, plumbing in good working order, and flooring properly treated all improve the value of the property. The same goes for landscaping and other curb appeal projects.
Eventually, tenants will move out and owners will need to advertise an investment home to new renters. Our clients have said there is no better feeling than having upgrades pay off with significantly higher rent rates. Having attractive features in a thriving market nearly guarantees improved ROI when the new tenants sign their lease.
Cost of Status Quo
“If it ain’t broke, don’t fix it” can spell trouble for a real estate property owner. Even with proper maintenance, homes with aging amenities start to look kitschy. Imagine walking into a home with shag carpet, goldenrod yellow appliances, and a matching blue ceramic tubs and bathroom sink ensemble. Needless to say, this time machine home will not attract top rent dollars.
The entire point of investment property is to earn the owner money. As an owner, you should want to squeeze every last dollar possible out to maximize your ROI. Owners who allow their properties to remain in status quo mode without upgrades leave rent money on the table. They stand to lose tens of thousands of dollars over the life of the rental property.
Conversely, it is possible to overinvest in a property based on the neighborhood’s market. Installing professional-grade Wolf kitchen appliances is a sweet upgrade but may not make sense in the long run. If the market cannot support the price point where the investment pays off, an owner stands to lose money. Lots of it. Of course, slapping in the cheapest second-hand electric stove you can find isn’t desirable either. Our experts apply those rocket science formulas to determine the sweet spot for upgrades that garner the highest rent rates.
Instead of making random upgrades, make sure your rental property provides you the maximum ROI. As the top-rated property management company in central Florida, The Realty Medics provide you “rental property peace of mind.” We will offer advice on upgrades and can help you find the best rates to complete projects.
Interested in Improving Your Property Investment?
Call us at 321-947-7653 or complete our online form for a Free Rental Analysis to get started.