Your residential property is an investment in your future and if handled well can bring you an excellent return. There are a number of improvements you can make to customize your property, making it comfortable and welcoming, attracting buyers and the right tenants. If you want to see a maximum return on your investment, you need to do things within a budget that will attract the right tenants and buyers. In this guide you will discover how to invest in your residential property to get the most bang for your buck, bringing the best rate of return on your investment.
Table of Contents
- Chapter One: How to Get the Most Out of Your Residential Land Investment
- Chapter Two: How Adding Curb Appeal Leads to Big Returns
- Chapter Three: How to Get Greenbacks by Going Green
- Chapter Four: How Adding Square Footage Results in an Enormous Return
- Chapter Five: How Basic Updating Yields Excellent Returns
- Chapter Six: How Turning Your Bath into a Designer’s Paradise Improves Your Property Value
- Chapter Seven: How to Create a Dream Kitchen While Increasing the Value of Your Property
Chapter One: How to Get the Most Out of Your Residential Land Investment
When strategizing to maximize your residential land investment, you should consider whether your residential property is well positioned to increase in value. If it is in an area that is rapidly developing, then the answer is probably yes. If you aren’t sure, check the history of residential land sales in your area over the last five years. If your numbers show a downward trend, then you may need to add improvements to protect your investment. If you haven’t purchased your land, there are many considerations you should take into account which can be found in the resources provided.
Consider if you will make a better profit by taking on a development, or by simply adding utilities. In many areas, undeveloped land can be a huge tax advantage while in others, it can be a liability. Weigh the cost of improving the property against the price of improved properties. It may be profitable to add utilities in some areas and not in others. If you need help making the decision whether or not to develop, a solid development and real estate expert such as Macken Companies can guide you. Having the expertise from an experienced developer can help you determine if a single residence or multi-family housing will maximize your investment.
Chapter Two: How Adding Curb Appeal Leads to Big Returns
Simple things like seeding the lawn and treating for weeds can go a long way toward improving your curb appeal. Cutting back overgrown shrubs and tree limbs that may be obscuring your residential property also helps. These are things you can do for a very small investment, especially if you can do most of the work yourself. Adding flowering plants and accent shrubs is also a great way to improve curb appeal and easy to accomplish with almost any budget. Taking care of driveways and sidewalks with weeding and power washing can make a remarkable difference. These improvements are fairly easy to accomplish and go a long way to improving the appearance of your residential property. This holds true for both single family and multi-family dwellings. Curb appeal is a huge selling point and draws buyers in to see the rest of the property.
Updating the exterior of the residential property can be accomplished with paint, vinyl siding, or simply a good power wash if the exterior is good condition. If your property’s windows and doors are in bad shape, spruce them up or replace them. There are tax incentives to make improvements for improving a residential property’s energy efficiency so while those new windows may seem expensive, after your tax credit and the increased value to your property, you may see a tidy profit.
Chapter Three: How to Get Greenbacks by Going Green
As mentioned, increasing your residential property’s energy efficiency can be offset with tax credits, lower energy bills, an increased buyer pool and interested tenants. If you are paying the utilities on your rental, this can add up to big savings. Aside from adding insulation, which is relatively inexpensive, consider upgrading your heating and cooling system, along with energy star rated kitchen appliances. There are many options available that you can choose from, such as switching to geothermal heating, heat pumps and solar heating. Updating old air conditioning units with more efficient energy star rated AC not only reduces your energy bill and greenhouse gas, it attracts buyers. Finding out the home is equipped with energy saving green appliances is something today’s buyers absolutely love. With your tax credits and reduced energy expenditures, you will see an immediate return on your investment and place your residential property in the category of “must see” when selling and renting, which allows you to increase your asking price and charge premium rental rates.
Chapter Four: How Adding Square Footage Results in an Enormous Return
The more square footage your residential property has, the more value. While taking on a home addition can be costly, there are ways to increase your living space without breaking the bank. One of the best ways to accomplish this is to finish space already in your property, such as basements, attics and unfinished space above garages. Finishing these otherwise unused spaces increases your overall square footage and thus increases your property value. If you can add a bathroom along with your new rec room or bedroom, so much the better. With the average cost of a room addition above $50,000.00, the cost of finishing raw space is well below this and dramatically increases the value of your residential property, especially when adding a bedroom with an adjoining bath.
Chapter Five: How Basic Updating Yields Excellent Returns
Simple improvements and updating doesn’t have to cost a fortune to bring you excellent returns. Painting your residential property can give it a much needed facelift, and by using neutral color pallets or soft colors that appeal to a wide pool of buyers, you can give your property a brand new feel and improve the smell. Over time daily living odors become part of any home, getting trapped in draperies, carpeting, wall, ceilings and air ducts. Getting the air ducts cleaned doesn’t cost much, but the fresh air you get in return is invaluable and attracts buyers and tenants. Painting the walls and cleaning the accent trim not only removes trapped cooking and pet odors, it updates the look of your residential property. Simply cleaning the drapes can be enough, but if they are outdated or showing their age, changing them out improves the look of your property and the appeal for buyers if you stick to subtle colors.
Sometimes cleaning carpets is enough to make them look brand new, but if you have hardwoods underneath, consider pulling out the carpet, sanding and refinishing the floors and adding area rugs. Buyers are looking for hardwoods so this can trigger a bidding war. Putting in new tile also increases your residential property’s appeal, and can be accomplished on a budget. Switching out hardware such as cabinet pulls and faucets in the kitchen and bath creates a new look for a small investment, while updating your medicine cabinets can dramatically change the look and feel of the bathrooms. Replacing old light fixtures and ceiling fans also costs very little but can boost your residential property’s value.
Chapter Six: How Turning Your Bath into a Designer’s Paradise Improves Your Property Value
Kitchens and baths sell properties so improving your bath can only increase your property’s value. You can splurge a bit here, because buyers go gaga for over the top baths. It’s true that kitchen and baths sell properties. When designing your bath consider resale and what buyers like and how to achieve that on a budget. Purchasing your marble countertops from a damaged slab is a great way to save money and still give your buyers what they want. If you want a great return, stick to subtle colors and bright accents. Monochromatic designs using subway tiles are always a hit. Adding double sinks in master baths is a must if you have the space. Large showers are trending as are jetted garden tubs for two. If you have to choose one over the other, consider placing a shower over the tub to give buyers both options.
Chapter Seven: How to Create a Dream Kitchen While Increasing the Value of Your Property
Renovating your residential property’s kitchen will attract a better buyer, especially if you go high end. A well planned kitchen will not only create a designer’s masterpiece, but will entice buyers, often creating bidding wars because buyers are looking for fabulous kitchens. While you can do a simple remodel by stripping and re-staining cabinets and upgrading hardware and fixtures, a complete remodel attracts the buyers you want and allows you to charge a higher rental rate. The more work you can do yourself, the bigger the return on your investment and the more money you will have to spend on materials. Fingerprint resistant stainless steel appliances and marble countertops make buyers drool over jaw-dropping designs incorporating contrasting tile and back splashes. Because kitchens yield such an excellent return, you should invest in the best materials and appliances.