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Once you’ve acquired an investment property, your top concern generating an income as quickly as possible. This may include forcing an appreciation of the asset. To do this, you’ll likely need to put more money into it—something many investors try to avoid. But it’s no secret the more you invest in your property, the more it will appreciate and the higher your return on investment will be. Making baseline renovations to your investment asset allows you to command higher rents and force appreciation, resulting in higher resale values.
But there’s a fair amount of planning that goes into forced appreciation. You need to make investments in your asset strategically. While opting for flashy landscaping or expensive lighting sconces may allow you to showcase your flair, they’re rarely the best way to add value to your real estate investment. Instead, invest in everyday baseline renovations to elevate the appearance and inherent value of the residence, without being too flashy.
Learning which investments in your real estate asset will pay off in the long-run will help you achieve greater success as a real estate investor. You’ll secure more income from your asset while renting it out to tenants, and extracting more value out of the property when it comes time to sell it.
But first, if you would like to learn how to leverage your property’s equity in order to finance these baseline renovations, click the link below to book your free strategy call at the link below.
Baseline renovations add value
Usually, the property improvements representing the best return on investment are baseline renovations elevating the aesthetic and convenience of the asset. Thankfully, most baseline renovations are fairly affordable and easy to execute. Here are a few baseline renovations that allow you to command higher rental rates and force faster appreciation:
Replace vinyl siding
While it’s not as exciting as many other types of property improvement, replacing the vinyl siding on your property can go a long way toward elevating its resale value and improving its curb appeal. New vinyl siding allows you to select a colour that both pops and differentiates the asset from surrounding buildings in the neighbourhood. Vinyl siding can also improve energy efficiency, reducing operating expenses.
The roof is often the most expensive single component of a building. Replacing an ageing roof before selling off the asset can allow you to fetch a significantly higher price for the property on the real estate market. Investing in a new roof also improves the asset’s curb appeal and energy efficiency. Replacing the roof on your property before it becomes a necessity can save you money in repairs.
If you’re renting out a single-family home, remodelling the basement into a usable living space is a great way to add significant value for both renters and future purchasers. If your investment asset is a multi-family property, consider renovating the basement into a community space, like a laundry room, storage center or game lounge. By converting an underutilized basement space into a comfortable living area, you’re adding to your assets square footage with very little effort.
While new windows aren’t always easy to notice, they can improve a building’s environmental efficiency. In the wintertime, insulated windows can help trap heated air indoors. In the summer, they keep the warm air outdoors, blocking harmful ultraviolet rays from entering the building. It’s often prudent to replace windows at the same time you opt to replace the building’s vinyl siding.
The state of the bathroom is often one of the deciding factors prospective renters and purchasers consider before moving into a home. Investing a bit of money in the quality of your investment property’s bathroom could go a long way toward wowing potential renters and other investors. Consider adding a comfort toilet seat, an expanded sink area and a larger, more luxurious tub. Even something as simple as mounting more wall mirrors can help.
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Adding value through property makeovers
If you’re hoping to secure an even higher return on your investment, and you have the capital to make large-scale changes to your property, here are a few full-scale makeovers to consider. These will greatly improve the amount of income you’re able to generate through forced appreciation, but they come at a much higher cost.
Make the property smart
One way to add value to your investment asset is to install smart home technology throughout the building. Not only will this appeal to a younger, more tech-savvy professional crowd, but it also optimizes your building management strategy, reducing operating costs.
Install a secondary suite
If there’s a lot of back-lot space behind your primary building, consider installing a secondary suite or granny flat. This additional space could command an additional rental rate if you rent it out either as a residence, vacation rental or even just as a community space for your existing tenants. Using extraneous space on your property will go a long way toward improving its overall value.
Add a deck, patio or sunroom
You can significantly raise the amount of living space in your investment property with very little effort by installing a deck, patio or sunroom. These low-impact structures are often built in as little as a day and can provide your residents with an enjoyable space to spend time when the weather allows.
Build an addition
While this may be the most dramatic type of property improvement you can make, building an addition is a surefire way to raise the value of your investment. Additions provide residents and future buyers with an enlarged, improved living space.
Savvy investors know how to analyze an asset and determine which type of baseline renovations suit it best. Take a close look at your investment asset, and determine which renovations are in-line with your goals as an investor.
Leveraging your remaining liquidity to perform a few simple baseline renovations can go a long way toward elevating the return on your investment you’re able to recoup, both in the short- and long-term. Forced appreciation may cost you more upfront, but it’s a great investment for investors with longer time horizons.
If you would like to learn how to leverage your property’s equity in order to finance these baseline renovations, click the link below to book your free strategy call at the link below.