The following is a list of ten ways that I use — and you can use — to force the value of your properties to increase without waiting for the market.
1. Don’t Buy Stupidly
While this first item technically does not require me to do anything special to the property, it is nevertheless the most important step in building quick value. If I buy a home for $20,000 less than it’s worth, I’ve forced the appreciation $20,000.00. While I don’t need to go into detail explaining exact methods, just know that your profit is made when you buy, not when you sell.
2. The Ikea Bedroom Miracle
One of my favorite ways to quickly improve a property is to simply turn a “bonus room” into a bedroom. The best transformation is turning a two-bedroom home into a three-bedroom home. Often times this can be accomplished for the price of an Ikea wardrobe, but can add tens of thousands of dollars to the value of the home.
3. Curb Appeal
It may be obvious but it is still shocking the number of investors who spend thousands remodeling a home but neglect to do anymore to the outside than a quick paint job. While fresh paint is a great way to add value, there are many more steps you can take as well to spruce up the curb appeal. A nicely manicured lawn with well-defined landscaping can help achieve higher rent or a quicker sale — both which can help force the value to climb.
4. Raise The Rent
If your rents are low, a small increase can add significant value to your property. This is especially true for multifamily properties. Raising rent just $25 per month per unit on a four-plex can add $1,200 per year in extra income and (depending on your area’s cap rate) up to $20,000 in forced value overnight.
5. Rent Out The Nook and Cranny
You may already be at the top of your rental price capacity, but that doesn’t mean you are getting all the income you can out of your properties. Are there any storage sheds, broom closets, garages, or simply vacant land that you can rent out to increase your income? Mini-storage is a multimillion dollar industry and you probably have more space to rent out than you realize. As with raising rent, additional income often means more value.
6. Increase Your Fees
In addition to capitalizing on all the physical ways you can increase the income in your investments, how about the fees? Are you charging for background checks, late rent fees, missed maintenance appointments or parking violations? How about your laundry facilities or paid parking? Are you getting all the fees you deserve?
7. Lower Your Expenses
You are probably paying too much for too many things. As an investor, one of the “hats” you wear is to be the auditor of your business. Perhaps you can negotiate a better rate for garbage pick-up. Perhaps you can transfer the Water/Sewer/Garbage expense to your tenant. Perhaps spending a few hundred dollars getting all those dripping faucets can cut down your annual water bill by thousands of dollars? Whatever your strategy is, by decreasing expenses you are able to increase the value of a property.
8. Add A Bathroom
In the old days, one bathroom was standard in most homes. If you are remodeling a home and find this is the case, take note of where the plumbing is located and what extra space there is around, above, or below that plumbing. Often times you can add a small half bath for several thousand dollars but add tens of thousands in value by doing so.
9. Tear Down These Walls
As long as a wall is not “load bearing” (and sometimes even if it is), you can often take down a wall (or half of one) in a matter of hours and create a much more “open concept” feel. This can help increase the desirability of a home and thus improve the value as well.
10. Paint the Neighborhood
Often times one of the biggest detriments to your property’s value is not your property at all — it’s your ugly neighbor’s home (the home is ugly, not necessarily your neighbor; but quite possibly both.) A quick paint job, landscaping, or simply a run to the dump can often be the best money you can spend when trying to increase the value on your own property. Obviously some tact is needed and many people are opposed to getting “charity,” but it’s hard to turn down a free paint job or yard clean-up.
There you have it! Those are just ten of perhaps hundreds of ways you can quickly add value to any property you own. Don’t use the “I’m waiting for the market to improve” excuse. Take the market by the throat and force it to improve.
If you have any real estate questions or if you are thinking of buying or selling your home, please contact James Louie Chung, Metro Vancouver REALTOR® — Real Estate Agent at [email protected] or call / text ( 6 0 4 ) 7 1 9 — 6 3 2 8 today!
Source, Image: Bigger Pockets, Design.Shuffle