Investing in real estate never fails to be an effective hedge against inflation. Considering that property values are constantly rising, those who can muster enough resources to build a real estate investment portfolio are banking on the potential returns they could grab in the long run. It’s no wonder that even young professionals today are entering the field with expectations of turning an immense profit. However, it pays to know that adding property to your portfolio doesn’t guarantee instant success.
Real estate can be a good source of passive income, but what many people seem to forget is the fact that an investment requires a great deal of time, effort, and money up front to work. Not only will you be spending time promoting your property, but you will also put your best foot forward in making sure it gets the attention it needs from renters and first-time home buyers.
Whether you’re out looking for tenants or refurbishing distressed properties to sell them for a profit, it pays to consider the kind of improvements that guarantee a good return on your initial investment. Here’s a list of possible upgrades you can opt for to boost the profitability of your real estate investments.
1. Boost the Property’s Curb Appeal
Exterior improvements matter just as much as interior upgrades. You will need to make sure it looks inviting from the curb, especially if you’re planning to fix and flip a single-family home. Focusing on the right curb appeal improvements will not only allow for a more welcoming exterior that encourages motivated buyers to place an offer. They can also justify a higher asking price, especially if the property is situated in a high-end neighborhood where property values are greater than the national average.
More than just adding a fresh coat of paint, you should also check the roofing for holes, missing shingles, and other issues that could easily be noticed by meticulous buyers. If you’re buying an investment property for the purpose of renting it out to tenants, make sure the entrance is spotless and well-lit. Signage should also be inspected for broken bulbs, but you may want to go for a replacement to go with the apartment’s modern look.
Consider adding extra features such as chairs or sofas on the building’s terrace. To allow for a cleaner and spacious look, consider trimming overgrown branches, clearing walkways and driveways of debris and clutter, and adding ornamental plants to the front lawn. Setting aside time and money for these improvements and more can help elevate the property’s curb appeal with guaranteed returns.
2. Freshen up the Interior
From the outside, focus your attention on possible interior upgrades that fit your budget and, at the same time, meet your investment needs. Whether you’re renting it out or reselling it for a higher price, the property should undergo major interior renovations if none were undertaken for more than 10 or 15 years.
These become even more of a necessity if it’s an apartment that has worn down by age, environmental factors, poor management, and high foot traffic. Whichever the case, use only interior upgrades that are manageable and cost-effective. Repainting the interior walls can only do so much to update the look and feel of the property, but there are other improvements worth checking out.
In the case of properties that have stood for more or less a hundred years, you should expect the flooring to show wear and tear as well as termite infestation that could have spread to the foundations and staircases. Replacing these parts with more durable materials may involve a considerable cost, but it’s well worth it if it means keeping a high occupancy rate or selling for a profit. Addressing these issues can enhance the property’s structural integrity and give the interior a more polished appearance. You may also want to refurbish the moldings and other details.
3. Add and Replace Fixtures and Features
The more fun part about property investments is the fact that you get to improve certain features that could draw in tenants or buyers. An apartment that does more than provide a cozy living space for young renters won’t have problems with high vacancy rates. As you refurbish the interior, consider adding features that will allow the property to compete better in today’s market. Include common areas like a lounge or green spaces. High-end features like a fitness center and a laundromat could also be great additions, as they could provide additional income streams.
Other than these fixtures, you will also need to remodel the kitchen and bedrooms by adding extra storage units and completing the layout with up-to-date appliances. Lights should also be replaced with LED bulbs, and there should be ample entry points through which natural light could flood the interior. Not only will these improvements allow for a more comfortable and lively atmosphere that your tenants can appreciate, but they could also translate into energy savings.
4. Get a Reliable Property Manager
You might think that improving an investment property stops at these ideas, but if there’s no one to maintain them, you’re less likely to sustain these improvements. Once you have made the right upgrades, it’s only a matter of making sure these remain well-maintained for the long haul. You may not have the time and resources to do the job, so you might as well get a property manager to do it for you.
Whether you’re focusing on residential properties or building a commercial real estate portfolio, a property management company can help with maintaining the facilities of your assets, making sure that the improvements you’ve made will boost your cash flow and preserve the property’s value. Just be certain that the company has experience managing the types of assets you have in your portfolio.
Endnote
If you want to make the most out of your real estate investment portfolio, applying the right upgrades could deliver the best possible returns. Taking these tips into account will set you off on the path towards it.