Quickly Increase the Value of your Rental Properties
Improve Outdated Units
While the first step to improving the value of your rental property seems obvious, it may not be entirely understood. In one step, you can improve the value of the asset and its income generating potential. Modern units, even in older neighborhoods, allow you to increase rents. Improved asset valuation will assist you in eliminating Private Mortgage Insurance (P.M.I) that is usually required for your earliest investments. Drop that cost, increase the rents, and you’ll have made a great improvement to your bottom line.
Know your Market
Get familiar with fair market rents in your area. Determine the property qualities that improve and decrease market rents in your immediate neighborhood. Where does your property fall on the spectrum? Calculate your rents carefully according to this comparison. Advertising for, and charging rent that is too high, will lead to unplanned vacancies and lost rent. On the flip side of that coin, renting for less than fair market value leaves money on the table.
Decrease Expenses or Include them in Rents
Assess your expenses for items such as hazard insurance and property taxes. Are these in line with the actual value of your property? Certainly, you need enough coverage to replace your investment in the event of a claim, but overpaying for coverage that you will never benefit from takes money out of your pocket. Ensure that your policy accurately reflects your requirements.
Evaluate your property tax bill. Is the valuation of your property accurate and in line with neighboring properties? If not, contact your municipality’s assessor to ask when the next opportunity for revaluation is scheduled. When you have that date, get your data together and be ready to present it. There could be serious amounts of money on the table here.
Finally, ensure that your tenants are either paying for utilities directly, possibly through sub-metering, or including those costs in rent.
Increase Rentable Square Feet
Think carefully about your properties in terms of rentable square feet. Are you maximizing that and charging for all available spaces? Perhaps you have an off-street parking space that your tenant isn’t using. Could you rent that to another tenant? Or a neighbor? Do your tenants have lockable storage units in their basements? Most tenants are willing to pay a premium for this convenience. These, and other options, would be relatively low cost enhancements that would reap valuable rental income.
Wrap Up
Sure, all of the items on this list could be completed as DIY projects, addressed over time. However, hiring Plennes Property Management will decrease that time dramatically. Allowing you to reap the benefits of increased asset values much sooner.
Call us at 414-899-2223 to discuss your options today!