Essentially, there are three different ways to maximize the return on your investment that we want to talk about today. These are preventative maintenance, curb appeal, and upgrades.
Ogden Investment Property ROI: Preventative Maintenance
Statistics have shown that the number one reason tenants move out is deferred maintenance. I know that as an owner, we often feel like we want to save some money instead of doing a little maintenance. But, that little piece of deferred maintenance can turn into a larger problem. It also creates other problems. It’s better to attack the small problems right now.
Because tenants are more likely to move due to deferred maintenance, you really lose money when you factor in the vacancy that’s created. If your property rents for $1,000 per month, and your tenants move out and leave you with two weeks of vacancy, it costs you $500. So, the $300 fix you avoided is suddenly very expensive.
Investment Property Utah ROI: Curb Appeal
Show a property that’s appealing and inviting. You don’t want a lot of garbage out front. If you’re in the middle of a turnover and you’re replacing carpet, you don’t want the carpet spread out on the front porch. It’s hard to do showings if your current tenants are outside smoking. Good curb appeal includes green grass and neatly trimmed bushes and trees. Most tenants will decide if they’re not going to rent a place as soon as they pull up to a house. The curb appeal usually indicates what the home will look like on the inside.
Ogden Investment Property ROI: Upgrades
We sent a survey to our tenants to see how much extra they would pay for new carpet or new kitchen appliances. The information we got back was very interesting. Some said they would pay an extra $50 a month for brand new carpet throughout an apartment. In an average two bedroom apartment, new carpet would cost around $1,200. So, if your tenants will spend $50 more a month in rent with that carpet, you’re earning $600 more a year. That’s a 50 percent return on your investment. You won’t get these numbers anywhere else. Appliance packages are available, too. You can get a new fridge, oven, stove, and range for around $1,200. If you can do that and charge even an extra $25 a month, that’s $300 a year, which is a 25 percent return on your investment. Your payback will be two to four years.
If you have any questions about your investment property or how professional property management companies like ours can help, please contact us at Reeder Asset Management. We are a full-service property management company with offices from Salt Lake to Logan.