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Property Management Blog

Published on Wednesday, March 10, 2010

Ways To Spruce Up Your Investment Property

 

Love At First Fright

On your way to work one day, you spot it. It is a For Sale sign out in front of a home that must be at least fifty years old. You have been eying this house ever since the last tenants moved out over a year ago. The home is dirty, needs obvious work and the yard is a mess. Glassy eyed, you do not see all of these as hindrances, or reasons to keep on driving. You see a possible investment property. A few weeks later, the deal is closed and you have got yourself a fixer. Now what?

Bargain Hunting For Repairs

Now the fun stuff begins. How do you turn an investment property from shabby to shining, from dirty to delightful? After all, the point is to make a profit, not just plug a bunch of cash into it and hope for the best. It is time for you to get down to the business of renovating your new purchase. The roof and the foundation are strong, so no worries there, but the inside is a mess. Years of wear and tear on the carpets, holes in the walls and dingy floors are common in a well lived home, but a buyer does not want them. Floors first. Look for sales on carpeting or perhaps laminate wood flooring. Get your floors looking sharp and shiny and the whole house perks up. Next, the walls need some attention. An investment property will sell much easier if it that sense of newness is there. If those holey walls could talk, they would be saying ouch. Patch up any holes, plug up all of the nail punctures and old curtain rod marks and throw up some pretty paint.

Money Makers

Now that the floors and walls are done, your investment property should look and smell clean and bright. Give the kitchen and bathroom both a nice make over. Buy the most cost effective, yet still the best quality appliances that you can find. Search out the bargains. In the long run, you will profit from a good, thorough search for the best prices. Replace old, stained sinks and counter tops with something more contemporary, and again, always find the best quality at the lowest prices. At closing time, that becomes money in your pocket.

The Devils In the Details

When the big basics are completed, it is time to begin thinking about the special touches, the little glittery specks that give a show stopping impression when a buyer walks through the door of your investment property . Ceiling fans add flair as well as usefulness to the home. New light fixtures can subtly alter the appearance of an entire house. Hardware such as towel racks, door knobs, cabinet and drawer pulls and even light switch plates are all small things that can pay big. You do not want to go crazy here, because these small things can certainly add up in price, and many times a new home buyer wants to add special touches of their own. A little sparkle goes a long way.

Now for the outside. Curb appeal is key here. Rent a pressure washer and clean off all of those years of dirt and grime. Paint the exterior trim, cut low hanging branches off of the trees, clean up that yard and make certain that the front entryway is welcoming visitors in a way that exudes warmth and charm. Clean any old oil marks or spills out of the driveway. Dirt of any kind will turn a potential buyer off. They see it as a mess that they will have to deal with, and they simply keep looking. Give attention to the windows, and even the mail box. 

Take Your Check To The Bank

Put some time, a lot of bargain hunting and a good chunk of effort into your investment property and watch it pay big dividends in a short period of time. You might make enough profit to turn around and feed your renovation addiction by purchasing the house two blocks over that just went on the market.

 

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Landlord Knowledge Base

If you’ve ever considered investing in a few rental properties in Philadelphia or Bucks County, PA now might be a good time. Prices are still low in Philadelphia, but have been on the upswing. According to the National Association of Realtors, the median price of an existing home in a US metropolitan area grew 13.7% between July 2012 and July 2013, the latest in a 17-month streak of year-over-year price increases. 

New landlords can choose from properties that are likely to appreciate and a large pool of potential renters.Licensed realtor Pat Mueller cites a few reasons for this trend: “Many families have lost their homes to foreclosure and are entering the rentals market for the first time in years. Mortgages are also harder to get now, so fewer people are qualifying for a new one.”The more skills you bring to the table to get into Houses for Rent in Philadelphia Philadelphia or Bucks County, PA and the more time you have to devote to your properties, the faster you can make a return on your investment. 

But investing in rentals can also be disastrous (or too stressful to be worthwhile) without expertise. Here are three professionals you may consult about your new rental properties, and what you can do to mitigate how much they cost you:Handyman:  You may need to hire a specialist for some work on your rental. If you need new outlets or new pipes, for example, hire an electrician, plumber or licensed contractor. Handymen usually tackle smaller, more manageable tasks, like:

  • Painting and paint removal
  • Drywall repair
  • Minor appliance repairs (fixing a leaky toilet or faucet, among others)
  • Installing tiling or flooring, moldings, windows, doors
  • Refinishing decks, cabinets and other wood items

When You Could Skip It: You could do any (or all) of these projects yourself if you have the time and interest in learning. Of course, this only works if you live relatively close to your rentals and are flexible enough to service them on short notice. And if you’re willing to respond to the occasional 5 AM basement flooding.

Average Savings: Any base rates or costs-per-hour vary from location to location in Philadelphia or Bucks County, PA , but nationally, you can expect to spend an average of $60 to $85 per hour for repair costs. It general costs less to hire an individual handyman than a handyman employed by a company. Expect an additional charge if your job requires a trip to the store for materials.

Resident Property Manager As the owner of a handful of rental properties, you may be able to manage them yourself, but if you want help, a single resident manager would probably be more cost efficient than a property management company. Resident managers may:

  • Serve as a handyman
  • Advertise vacancies in your units
  • Show apartments to prospective tenants
  • Review rental applications
  • Collect rents

When You Could Skip It: Again, the closer you live to your properties and the more spare time you have, the less likely you are to need a manager. The obligations of being a boss will also cut into the time you save on maintenance.

Average Savings: The national median wage for residential managers is just over $25 per hour. Research the wages in your community and adjust according to how much responsibility your manager will take on. 

Real Estate Agent: Once you’ve gotten your financials in order and done your own research on the neighborhood(s) you’re considering, you might contact a realtor to show you potential properties. You can also arrange for a realtor in Philadelphia or Bucks County, PA to show rentals once they’re ready to rent.

When You Could Skip It: It depends. Even if you’re a local, or have thoroughly researched the neighborhood(s) you’re considering, a realtor is a great resource for a first-time rental buyer. Realtors have access to data and statistics not necessarily available to the general public and first-time buyers may not know all the right questions to ask. Using a realtor to fill your Houses for Rent vacancies is less of a no-brainer, depending on your other time commitments or whether you plan to hire a resident manager who could do the same thing.

Average Savings: As a buyer of rental properties, as when buying your own home, sellers typically pay most, if not all, of the buyer’s realtor fees. In this case, Mueller points out there’s little reason not to work with a realtor. For help in filling your units in Philadelphia or Bucks County, PA, the services of a realtor would set you back between 10-20% of the unit’s rent per month.  Mueller recommends interviewing with several brokers before making your final decision to invest into Houses for Rent .

The Bottom Line: As a new landlord, you can’t necessarily control the flexibility of your schedule or the amount (and cost) of unexpected repairs to your properties. Rentals are a long-term investment. However, to maximize profits from your Houses for Rent, new rentals, you can buy close to home and start small. It is best to begin with just one or two properties. This will allow you to maximize the time you spend on your properties’ needs, and minimize the amount you’ll have to pay anyone else.

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