By Tali Wee of Zillow
Rents are rising across the United States, making investment properties lucrative opportunities for landlords. The competitive rental market makes higher rents possible, but also causes landlords to compete with neighboring properties for the best tenants. So, how do landlords draw the best tenants and retain their business?
Here are four property upgrades that appeal to renters to increase retention and profitability.
1. Install Bright Lighting
Lighting is one of the key elements of staging a unit as well as setting a welcoming atmosphere. Avoid repelling prospective tenants with the depressing effects of dreary lighting. Replace incandescent or fluorescent lights – reminiscent of a high school gym – with energy-efficient bulbs that imitate natural light. Energy-efficient bulbs last longer than other bulbs, saving landlords replacement costs and reducing electricity bills for renters.
In addition to the style of bulb, landlords should focus on the types of lighting. Before leasing, install plenty of ambient lighting such as overheads, recessed and track lighting. Include task lighting under kitchen cabinets and above bathroom vanities. Install a motion-sensor fixture near the entrance so renters can easily locate key holes at night. Lastly, provide plenty of outlets for tenants to add lamps wherever necessary.
Stage each unit with the main windows as the focal point. When prospective tenants view units, be sure to draw the blinds and curtains and turn on all of the lights. The bright atmosphere should attract renters and keep current tenants satisfied with their living spaces.
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2. Invest in Durable Flooring
High-quality flooring creates polished interiors. But, flooring is an expensive upgrade and landlords aren’t apt to invest in finishes that quickly lose their value. Laminate flooring is highly durable and cost-effective at $1 to $6 per square foot. Opt for sleek styles, avoiding dramatic patterns. Laminate flooring resists moisture, stains and scratches, making it the ideal surface for pet-friendly rentals.
For a trending look, landlords should install bamboo flooring. It’s long-lasting but susceptible to moisture and scratches. Bamboo floors are recyclable and appeal to followers of the sustainability movement. Plus, they’re affordable at $3 to $9 per square foot.
3. Upgrade Appliances
Prospective tenants want new appliances, and current tenants desire upgrades, too. Nothing stands out more during a walkthrough than an ancient refrigerator. Swap out old appliances with newer Energy Star replacements. Again, energy savings benefit the tenant financially and the landlord with additional, marketable amenities.
Stainless-steel appliances are timeless and blend nicely with almost any kitchen style. Consider the current cabinets, countertops, flooring and hardware before purchasing appliances to maintain a unified decor throughout the space.
4. Patch, Paint and Replace
Tenants want to make their new spaces feel homey. When they move into units where the walls aren’t freshly painted, carpets are stained or the blinds are damaged, they feel like they’re living in someone else’s space. That feeling wears on tenants throughout time. Landlords who properly patch nail holes, repaint, shampoo carpets, replace bent blinds and torn window screens are more likely to retain their tenants.
Landlords should deeply clean each unit between tenants, replace air filters, sanitize appliances, pull down cobwebs and spruce up curb appeal. Tenants who start fresh can settle in and create comfortable homes – and when a space feels like home, tenants don’t want to leave.
Although rental property upgrades can be pricey, they assist property owners in yielding the highest returns on their investments. Higher returns cover the costs of mortgages, pay for maintenance and still secure positive cash flow to earn passive income.
Remember, thoroughly upgraded units justify higher rents that can lead to increased profitability of rental properties. Plus, keeping tenants happy reduces the cost of remarketing units, running background checks on new applicants, spending time showing availabilities and cleaning units between tenants.
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