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Ep003: Which Amenities To Add (& Avoid) in Your Rental Property
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In today’s episode Laci LeBlanc and I continue our conversation around the neighborhood standard and how this core landlord profitability concept relates to decisions around what amenities to add – or avoid adding – to your properties.Whether you are considering buying a new rental property or making some capital improvements to an existing property, I think you will find this episode thought provoking and enlightening.
SHOW HIGHLIGHTS
- The concept of the neighborhood standard is essential in real estate investment. It helps determine which amenities to consider adding to your residential rental properties. It is advised to only add amenities common in the neighborhood you're investing in to ensure a return on investment.
- The BRRR method (Buy, Rehab, Rent, Refinance, Repeat) is a viable investment approach that involves rehabbing a distressed property, renting it out, and then refinancing it. This allows the investor to recover their initial investment and potentially make a profit.
- When considering amenities to add to rental properties, it's important to consider operating costs and how to provide tenants with value for their money. Over-improving beyond the neighborhood standard could lead to higher maintenance costs and may not necessarily yield a higher return.
- Tenants in high-income neighborhoods or short-term rentals might have specific expectations from a property, including upscale kitchen appliances, premium flooring, high-end light fixtures, and luxury outdoor living spaces. Investors should consider these when making upgrades.
- Planning for capital improvements and guarding against overspending is crucial in real estate investment. It's important to balance between providing high-end amenities and managing operating costs.
- To maintain neighborhood standard, rental properties should offer functional and affordable appliances, flooring, storage solutions, exterior lighting, and more. These elements should be cost-effective and durable.
- Investing in energy-efficient light fixtures and luxury vinyl flooring can be a wise long-term investment. These upgrades can increase the appeal of the property while reducing maintenance costs in the long run.
- When updating properties, investors should prioritize longevity and quality over extravagance. Choosing the right updates and amenities can ensure the property meets the neighborhood standard.
- Partnering with a local property manager who has in-depth knowledge of the local market can be beneficial for investors. They can provide insights into neighborhood trends, tenant preferences, and advise on cost-effective updates and amenities.
- Lastly, maintaining a property to the neighborhood standard doesn't have to cost a fortune. With careful planning and strategic investment, landlords can create desirable rental properties that yield profitable returns.
LINKS
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