Enter your email address for weekly access to top multifamily blogs!

All Things Property Management

All Things Property Management is a one-stop destination for folks interested in learning more about managing real estate. Broken down into a variety of targeted columns, the information that you are looking for is easily accessible — from investing tips and best practices in The Intelligent Investor to the real-life dilemmas of property managers in Stories from the Front Lines. We’ve brought on contributing writers from across the country to share their respective expertise with you, whether you’re a landlord, a professional property manager, or an association board member. Your feedback, participation, and comments will help us deliver the information you need most.

3 Questions to Ask Yourself Before Renovating

Determining when the time has come to do renovations on your rental property is a process that requires good judgment and a careful analysis of your goals. Depending upon your situation, renovation time may occur before you ever even move tenants into your property or, alternatively, it may be one of the final things you do before selling your investment property. Following are a few key questions to consider when contemplating a renovation.

Would I want to live here myself?
While you don’t have to outfit every rental you manage like a luxury penthouse complete with every amenity imaginable, it is important to make your rental units as comfortable and livable as possible for tenants. Upon purchasing a rental property (and every few years thereafter), look around your rental unit and ask yourself: Is this somewhere I would want to live? If the answer is no, it’s time to start taking a serious look around at what features could stand changes or improvements. The better condition your rental units are in, the more quality tenants you will attract. And the better quality tenants you attract, the better care they will take of your units. Good tenants are a key element to consistently maintaining the value of your rental property.

How do I stack up with the competition?
If you are looking to sell your investment property at any point in the near future, you should make yourself familiar with comparable properties in your area. In real estate, sale prices are determined in large part by “comps”—properties that are similar to yours in terms of size, location, and amenities. Knowing what value these comps command will give you a good idea of where you stand. Let’s say, for example, that a comparable property in your neighborhood recently sold for your target sales price. Take a careful look at that property and then realistically compare it to your own, asking yourself how you stack up. Remember, this involves more than just a comparable number of bedrooms and baths. If, for example, the comp property features units with renovated kitchens, while yours does not, and all other factors are fairly equal, chances are your property will command less on the sales market. In order to meet the competition and bring up your price, it may be time to consider renovations to your units’ kitchens to bring them up to the competition’s level.

What is the cost/benefit ratio of renovations?
With the previous scenario in mind, though, remember that it’s important to consider cost/benefit ratios when it comes to renovations. To determine this, speaking with both a trusted contractor and real estate professional is recommended. Let’s say, for example, that you speak with a contractor about potentially renovating the kitchens in all of your rental units and learn that this will cost approximately $35,000 total. You then speak with a real estate agent who determines that updating the kitchens in the rental units will bolster the property’s overall sales price by approximately $37,000. Is this cost/benefit ratio worth it in the long run or is it best to go with the lowered projected sales price your property currently demands? Consider such questions carefully before embarking on renovations.

Every landlord wants their rental property to be in the best shape possible at all times. But before embarking on a costly renovation, it’s important to consider your goals, the market, and the expected financial impact of any given renovation.

Property Management Software Rental Property Management Software Landlord Software HOA Software Property Management
Rate this blog entry:
0
 

Comment Below

  1. Posting comment as a guest. Sign up or login to your account.
Attachments (0 / 3)
Share Your Location
  STOP ask yourself do you do your follow up calls or thank you cards?!?!?!?  By Jolene Sopalski Leasing Specialist WRH Realty Services If you answered no to that question then I want you to hold up your right hand and pledge the following “ I will  start following up with my prospects no prospect will go un-followed up”. Good now if you are one of the ones that said yes I do my follow up calls and thank you cards I want to give you a big hug so just picture me giving&...
In this economy, every dollar counts, but geez, we still have to shop, update our apartments and pay the bills on time and not break the budget. So here are my favorite ways to update an apartment and make it feel like it is my special space while not spending a lot of money.         1.       Move your furniture around, or switch the rooms, bedrooms, dining with living, just do it. Free         2.   &n...
Demand for apartments in Dallas/Fort Worth is getting back on track. During the first three months of the year, renters absorbed 6,520 apartment units, the best quarterly demand performance seen since fall 2007. The occupied apartment count climbed by 9,970 units between March 2009 and March 2010. It appears that a stabilizing local economy is allowing apartment demand to pick up again. While the annual employment change numbers still look pretty bad, most of that loss actually occurr...