5 Major Mistakes that Could Lower the Value of Your Investment Property

5 Major Mistakes that Could Lower the Value of Your Investment Property

5 Major Mistakes that Could Lower the Value of Your Investment Property

By Charlie Michaels

If you’re a property investor or you’re in the market to buy your first investment property, there are a few things that you should know that will help to ensure your property is a success. After all, simply renting a property isn’t enough. You also need to optimize its profitability with a viable strategy. With that in mind, Charles Kelly has some tips to help you get the most out of your rental property.

 

  1. Don’t Overlook Amenities

 

Investors shouldn’t overlook the importance of amenities to potential tenants. This is especially true in competitive rental markets where comparable units may have features such as in-unit laundry, a dishwasher, or a community gym. Pet-oriented options are extremely popular these days, and child-focused amenities are also becoming more prevalent.

 

If you want to demand the best rental rates — and still attract tenants — you need to invest in amenities. If your property is a vacation rental, think in terms of luxury, too. Other examples include upgrading appliances to feature newer fixtures, smart tech capability, and stainless steel finishes.

 

  1. Keep Up With Repairs

 

Speaking of appliances, investors should always make sure that they’re in good condition before marketing a unit. If you’re converting a fixer-upper to a rental, that means you’re likely going to need to invest in the property before you can rent it. If you notice the dishwasher is on the fritz, you should call a local dishwasher repair provider. Reading online reviews can help you find the best professionals, and you can easily schedule an appointment for a quote. To offset the cost, you may even find a company that offers credits or discounts for appliance repairs.

 

Failure to perform basic maintenance is a surefire way to repel potential tenants, and more importantly, it’s a major liability. This can be exacerbated if you own more than one rental property. You should also take care of any leaks, burnt-out lights, and other common problems.

 

You may also want to consider budget-friendly projects to improve your property’s appraisal value. Even minor updates such as a new color and improved landscaping can help your property’s value, meaning you can command higher rents.

 

  1. Choosing the Right Location

 

Location is the one thing about your property that you’ll never be able to change — so you need to choose wisely and consider your target tenant. Proximity to bars and restaurants will be a big bonus if you’re renting in a college town, for example — but placement in a prime school district is far more important for a suburban single-family rental. No matter how much money you pour into upgrades, you’ll likely have trouble keeping tenants if your property is not in an ideal location.

 

  1. Establish Personal Liability Protection

 

As the owner of the property, you are liable if people are injured on or around the premises. Therefore it’s a good idea to form a limited company in order to provide yourself with certain legal protections and tax benefits. There are a number of online formation services that can help you set up your limited company. Read reviews to get started and make an informed decision.

 

  1. Protect Your Investment

 

Offering security draws quality renters. Be sure to research your options—security system costs vary depending on the choices you make. You can pay for a monitored system or install smart home solutions, depending on what makes sense for your rental. Also make sure you understand how to troubleshoot common issues that may occur with the components of your smart security system. Having the right security system in place will help protect both your tenants and your property, and with solutions on-hand, you and your tenants or guests can enjoy peace of mind.

 

Don’t Squander Rental Revenue With Mistakes

 

Investing in real estate is one of the best ways to develop a portfolio — but if you want to make a profit, you’ll need to find a promising property, manage it through a limited company, and invest in any repairs and upgrades that it may need. These tasks aren’t as simple as you may assume, and it’s easy to compromise your income with simple mistakes. Avoid this by focusing on location, repairing broken appliances, and upgrading outdated fixtures.

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