When you're renting out a house or an apartment, you're walking the fine line between keeping that apartment competitive on the market, while still pocketing enough profit to pay for its upkeep and make the investment worth the trouble. As a landlord, it can be difficult to fork over money for unnecessary improvements: if it isn't broken, why fix it? Some new upgrades, like windows from places like Five Star Windows Inc and nicer finishes, will pay off in the end. Here are a couple reasons why.
1. You can raise the rent.
If you install upgrades that are nicer than any other apartment on the block, you can get ten or twenty or fifty dollars more each month when a new tenant moves in. You can justifiably charge more per month when you:
- replace broken appliances with nicer-than-normal ones. Every tenant is tired of the junky white electric range without a range hood and fan. When they walk in and see a nice, stainless steel gas unit, they'll automatically be willing to pay more. Over time, the new appliances will pay for themselves.
- upgrade the windows. Many older apartments still struggle from single pain, loosely sealed windows that result in drafty apartments and high utility bills. You can advertise new windows as part of your rental property. People may pass up other properties and choose yours just because the windows have been upgraded, even if they have to pay an extra $20 a month for the improvement.
- add storage. Building a shed in the backyard, or a storage facility next to an apartment building may seem like a hassle, but tenants like to know they have the option of external storage on the property.
- add long term improvements, like a central air-conditioning system, or washer and dryer hook-ups. You can charge more the convenience of having an in-apartment laundry facility, and air conditioning is a luxury that many people are willing to pay for. These improvement will also make your apartment more marketable, so you'll have an easier time finding tenants.
2. You can get a break on taxes.
The improvements that your tenants will really appreciate are ones that help the apartment to be more live-able. Don't put off replacing old windows, furnaces, doors, or water heaters. Investing in better appliances and replacement windows is something that you can claim on your tax return-- if you choose energy efficient options. Don't be deterred by the higher cost. You can get $200 dollars back on your taxes just for opting for these better windows.
With new window installation, you'll also get higher tenant satisfaction-- after one winter, you won't have to deal with people moving out because they don't want to freeze next year. Losing tenants always costs money, because you have to prep the property for the next renter, and you may lose a few months of rent before finding someone new. Drafty windows not only result in a higher tenant turnover, but they also dissuade people from signing a contract at all.
3. You can attract higher caliber tenants.
For some reason, tenants notice the little things. They may end renting a place because the faucets and tile are nicer, or the windows seal well. If you choose better finishes for your property, you'll attract the kind of people you want renting that space. Generally, a place that has perks like quality toilets seats, shower heads, kitchen backsplashes, and well-fitted window treatments will attract people who appreciate those things, and are willing to pay for them.
You can also bring more character into the apartment by choosing windows with tinted or colored glass, or by choosing windows that follow current trends: windows separated in to panes, or large windows with old-fashioned latches that push out or slide up in a more European fashion. These small differences make an apartment both unique and fashionable for clients who are looking for something outside of the box.
You'll have fewer damages and repairs, because the tenants will actually take pride in the space. Generally, if something is run-down, people won't mind if something gets spilled on the carpet. But, if a place is nice, people feel more driven to keep it that way.