As much as rental properties are a good investment, as time goes by, they will naturally show signs of wear and tear which is why they need to be updated here and there. Interiors that are already old and fixtures that have been around for quite some time can cause your investment properties’ value to plummet, decrease in overall appeal, and could potentially require you to lower your rent to attract new residents.
As you work to keep your property value afloat and earn extra income via rent each month, it’s essential to choose the correct time to update your Austin rental homes. As a general rule, the ideal time to do some changes would be every couple of years for basic updates like carpet substitution, repainting, updating appliances, etc. Afterward, you can think about the more extensive upgrades like adding granite countertops, two-tone paint, or hardwood flooring. Although these upgrades seem like the ultimate way to lure better residents and add significant value to your property, you might ask yourself if they’re worth the cost.
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.
Renters are typically searching for rental homes with features and amenities that match their style and way of life; nowadays these are the ideal renters as they tend to be more open to the idea of paying more for quality. They understand that if they want an upgraded home, then they would need to pay more for it. Adding contemporary kitchen appliances, fixtures in the bathroom and other features to your Austin rental home would be a good idea to draw these kinds of renters.
Based on your market, once these renovations are complete, you should also be ready to raise the rent on an upgraded rental home. Potential residents understand that they’re going to pay a lot of for quality and are usually willing to try and do so. Residents interested in upgraded homes are more seemingly to take better care of them, enhancing the long-run profitableness of your rental properties.
As a bonus, upgrades using quality materials will increase the general worth and extend the lifetime of your rental properties. Higher quality materials tend to last longer, providing long value and yield on your investment.
Upgrades are all about value. Spending an excessive amount of on an upgrade may be a high potential downside because it suggests that you won’t be able to recoup the cost. Upgrades would force money up front; therefore, you’ll have to be compelled to consider your budget and ensure you have got enough cash flow to cover the value of home enhancements while looking forward to the eventual return. Another potential drawback to upgrading your rental property is pricing yourself out of your market. If you wish to upgrade to boost your rent, do your analysis first. Cross-Check comparable properties in your area to work out whether or not your value point after upgrading merely is too high.
Finally, it’s necessary to grasp that not all upgrades can increase the worth or demand for your Austin property. Taking the time to work out what to upgrade and what to leave as-is will assist you to avoid this pricey mistake.
Unless you are assured that a retro-style rental home is what potential residents are trying to find, having a concept to upgrade your rental homes may be part of a sensible strategy to keep your rentals competitive.
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