Is there such a thing as too much rehab? The simple answer is yes, there is. Any good Charleston property management professional would tell you that.
Believe it or not, fancy homes don’t always equal more rent. Sometimes, there is such a thing as too much rehab. Sometimes, what renters want is far different from what property owners think that they want. So, you need to know where to draw the line as far as renovations are concerned.
Below is some advice that you could follow when considering rehab:
The number one thing that most renters are looking for is affordable housing. Price is the single biggest determining factor for many people looking to rent a home.
People would rather have a cheaper place to live in rather than a showpiece that they cannot afford. So, you need to keep that in mind when you renovate your investment property.
And where the price is a big factor, you may want to consider becoming part of the Section 8 Housing Program. It would be an excellent way to earn some rental income while still providing people with low income with a decent place to live in. These include the elderly and those with disabilities.
The average rent in the Charleston area is currently about $1,500. If you have no idea of whether you can get this price for your property, you could consult a Charleston property management professional first to make sure.
There is always the temptation to raise your rental price far beyond that to recover the money you spent. The more you spend on renovations, the more money you have to make to recover it back. However, you are also likely to exclude a huge number of renters that could lease your property for a long time if the price was right.
You may end up with higher vacancy rates as a result of the higher rental prices. And that will force you to dig deep into your pockets to pay maintenance fees for your secondary property until it’s rented out.
Good Charleston property management service providers can suggest improvements that will affect your rental income the most. What works in one locale may not be what works in a different locale within Charleston. It all depends on the demographics that you intend to target.
For example, College students may prefer a home that is geared toward entertainment. But a young couple may want a more child-friendly home. Because property managers know the market better than you do, they can tell you what will work best for your property.
Additionally, property managers can also connect you to contractors that will provide you with the best value for your money since they have the right industry connections.
Since you are unlikely to get a good ROI if you spent too much on rehab, you may want to pick your battles. Think about what will have the most impact on making your property desirable without you spending too much money.
Is it security features such as security lights and stronger locks? Most people want to live in a secure home. Alternatively, would your potential renters prefer good internet? The latter may be an important benefit to offer due to the increasing number of people working from home.
You could also replace your old kitchen appliances with new ones that work more efficiently. That may appeal to renters for whom the kitchen is the heart of the home. And sometimes, all you need is a change of color on the walls.
You could also opt for strategic rehab projects that make you stand out among specific demographics. About 85 million American families own pets. But not all property owners accommodate pets. You could choose to do things differently by making your real estate investment property pet-friendly to attract pet-owning renters.
So, instead of spending a lot of money doing a full rehab, you instead spend on fencing your yard, installing pet-friendly flooring, installing screens on your property windows, etc.
You could also opt for renovations that make your property the ultimate rental for those with disabilities. This may mean updating your bathroom facilities, widening your hallways, building ramps, adjusting the height of cabinets and shelves, etc. to make your investment property handicap accessible.
Always remember that there is such a thing as too much rehab. So, you may need to weigh the pros and cons of doing full-scale renovations on your investment property. If there is no way for you to get a good ROI within a reasonable period, pick your battles. Aim for what will work best to attract the kind of renters you would like in your property.
Contact us for more tips on managing your rental properties.