Increase Your Property Value With These 8 Amazing Tips
If you have some experience in the real estate world, you might know what property appreciation is. However, if you are new to real estate, it is essential to know your preference.
Property appreciation is the process by which a real estate asset gains additional property value by the passage of time.
Real estate naturally appreciates for a variety of reasons, including inflation and market conditions. These natural forms of appreciation, however, take a considerable amount of time. A survey shows that in most of the markets, it is estimated that real estate assets appreciate at a rate between 3 percent to 5 percent of their actual value per year.
This growth is relatively slow. And to speed the process up a bit, real estate investors use several tools to force the appreciation of their properties.
Knowing the proper tools to forcibly increase your property value can be pretty helpful to appreciate real estate assets rapidly. So, if you are a real estate investor who wants to maximize your property value of his investment and free up capital to reinvest in other assets, getting to know the right tools and methods can prove to be quite helpful in increasing your current property values.
Before we dive in, if you would like to learn how you can use your property value to make additional investments, click the link below to book a free strategy call with our team here at LendCity today.
Raising Rent to Increase Your Property Value
One of the most common and most widely applicable ways for investors to appreciate their real estate assets is by raising rents.
Even though it was once an effective way of appreciating real estate, it has an adverse effect as well. Raising rent tends to alienate tenants, which tends to deprive investors of the potential income they can generate by renting their investment properties.
Unnecessary fluctuations in the rent are, on the one hand, an easy short-term solution of rapidly alleviating property, while on the other hand, it is a cause of massive losses.
Therefore, instead of constantly fluctuating the rents and disturbing the market property value of your property, you should try other techniques such as raising rents on a yearly interval. Apart from this, there are several different effective ways to force rapid alleviation in property assets.
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Forcing Property Appreciation to Increase Your Property Value
Forcefully appreciating property requires a bit of brainwork. Thoughtful ways to make your property look more appealing to other real estate investors can make your investment more profitable.
If your property has a high level of demand, only then will you have complete control over the prices when it is time for your asset to be listed on the market.
Forcing appreciation on your property requires attention to even the most minute of detail. Sometimes, even the most unimportant things may seem tempting to other investors, such as keeping baseboards in good shape or investing in routine landscaping services. These small details change the way investors view your property.
To command higher rents from your existing tenant base, you will be required to use a detail-oriented approach to your real estate asset. Here are a few artificial ways in which you can effectively force the appreciation of your rental property:
Add Services
Even though it might seem a petty thing, installing a few minor services to your rental property can considerably increase your property value. Installing a small security system for your residential rental units or a vending machine to your commercial rental companies can make it look quite appealing.
When it comes to your properties, the first impression is the last. The more presentable and appealing your property looks to your renters, the more the chances of people looking forward to renting and ultimately purchase your property.
Add Facilities
If there are any unutilized spaces in your property, you can use that space to elevate your property value for your investment. Consider ways of adding such facilities to that space, which could leverage your property's appreciation graph.
For example, if there is excess land outside your rental house, you could add a garage to space or even a swimming pool, which would subsequently lead you to demand a higher rent in the upcoming future. Similarly, you could break the walls inside the house to make a separate laundry room or a picturesque balcony, which will make your property look more appealing to renters and investors.
Cut down Expenses
Maintaining a high-quality rental property with plenty of amenities requires a reasonable sum of money. You must focus on making your property look presentable to investors and concentrate on cutting extra overheads so that you could earn maximum profit in the future.
Consider managing your property yourself rather than hiring professional property managers to save yourself on those excessive operational overheads.
Levy Additional Fees
Even if you do not increase your rents now and again, there are other ways in which you can earn from tenants. Imposing excess costs such as move-in fee, pet fee, late fee, non-refundable one-time deposits, and similar additional charges forces appreciation of your property without fluctuating the market graph that often.
It brings forth two additional benefits. The first one, being a good impact on potential investors. By implementing this technique, you can show investors that your property is highly profitable.
Secondly, it will save you from the unwanted headaches caused by your tenants, as applying this technique will help you set a strict, no-nonsense tone with your tenants.
Improve the Property
Property improvement not only means having to spend an arm and a leg on adding a building or making massive renovations. It can, on the contrary, be relatively inexpensive.
A simple whitewash can improve the look of your property and won't even cost you a kidney. The key here is to constantly keep improving your property to look like it is being taken care of.
These small yet consistent improvements will allow you to command the rent as per your likings and a higher sale price when the time comes to get rid of your asset.
Rent to Good Tenants
Another way to maintain and ultimately increase the alleviation of your property is to keep it in good shape. This can be achieved by finding tenants who can support your asset without causing it much damage.
Also, if you have investors interested in purchasing your property and find old tenants, who have been residing there for a few years without any incidents, it will put a good impression on them.
Even though real estate generally always appreciates, certain market conditions cause the property value to depreciate as well. Constantly working on factors to force the appreciation of your property can put you in a better position to control the renting and selling rates of your assets, regardless of the market conditions around you.
Don't Bank on Appreciation
It is of vital importance to understand that appreciation is never at the core of your investment strategy. Some investors think that if they deliberately depreciate the property value of their properties, they will be able to boost the future and at the time of selling their real estate.
Several real estate investors own properties in high cities, who deliberately lower the rent costs to attract renters. They then expect that the losses they face will be covered at the time of them, selling their assets as they will then be capable of leveraging the prices at a higher level.
This is, however, a faulty strategy as if a property isn't generating a high amount of passive income, the chances are that it would not be capable of providing the owner control over the selling prices.
Therefore, what should be of core value is to generate the maximum amount of passive income as it is directly proportional to increasing the market property value of the real estate. Slightly increasing the rental rates of a property will slightly increase its appreciation level and make it more appealing to investors and vice versa.
Seek Advice from your Network
If you need more details on how to force appreciation of your property, then your local investing network is a wealth of limitless potential. You can always consult with other investors in your area to get more accurate insights on the regionally specific improvements that you can make to your property to accelerate the appreciation of your investment ultimately.
Once again, if you would like to learn how you can use your property value to make additional investments, click the link below to book a free strategy call with our team here at LendCity today.