As a landlord, you always want to stay up-to-date with the real estate market on an ongoing basis to know your home’s value.
If your strategy is to sell when the market is up, it’s smart to keep tabs on home value so you can see when the time is right. You’ll also want to keep up with trends and expectations so that you don’t sell too soon. Certainly, no one can predict the housing market, but there are signs to look for that will provide you a good idea.
If you’re not planning on selling and still want to use the cash flow, it’s also important to understand the home’s value to ensure that your investment remains a positive return on your investment. You should know what comparable homes in your area are worth. And as a landlord, you should always keep a history of the upgrades, repairs and maintenance you’ve done on your properties so that you can keep your property in top shape.
How to find your home’s value
The best way to determine your property’s value is to look at what comparable homes have sold for in your area recently. You should do this often and regularly so that you can keep track of the housing market.
Factor in square footage when looking at comparable homes in your general area. If you’re looking at homes outside of your area, you will want to factor in the neighborhood and school district. Many online sites, such as Zillow and Redfin can provide you information and suggest the rental price you should be charging your tenants.
Whether you plan to sell when the market rises or you’re just looking to achieve more cash flow, there are many ways to increase rent on your existing properties.
Upgrade the kitchen
People love to see updated and modern kitchens. If your property has older countertops, renters may probably perceive the kitchen as dated, even if the material itself is in decent shape. Granite or quartz may not be in the budget for some landlords, if this is you, here are other improvements to consider to get that updated kitchen look.
- Refacing cabinets. Kitchen cabinets could cost around $3,000, depending on what you want.
- Updating the backsplash. A new blacksplash goes a long ways. This upgrade typically will run you around $10/sqft.
- Replacing old appliances. Major appliances will cost $500 to $1000 (depending on the brand and options).
- Improve lighting. Recessed lighting is fairly cheap and can be installed with a minimal to moderate skill level.
Remodel the bathrooms
Kitchens and bathrooms are the most important amenities to any home. If the countertops are beat up and your home still has old style sinks, it may be time to upgrade. A new toilet might be necessary as well. And while you’re at it, consider spending a little more to upgrade the shower.
Whether you’re looking to sell your property when prices rise or want to maximize your rental cash flow, it’s important to keep up-to-date with the value of your investment property. Get comparable prices and then figure out your cap rate. If you need to increase the value of your property beyond the kitchen and bathrooms, try adding more storage or install wood or tile floors.