One of the best ways to maximize profit is to spend less. This article will teach you a few great ways to save money by being a frugal landlord.
Without fail, you buy a property and renovate it, but then you are a little short on cash. You need to get the property rented fast to increase your cash flow, but you don’t have the money for renovations, which is when being a frugal landlord comes in handy.
Here are 11 tips for upgrading your property, while being frugal at the same time.
1. Buy Paint on Sale
If you survey landlords that have owned property for over five years and ask them what they recommend for cheaply upgrading a property, over 90% of them will say paint.
A great hack is to buy paint when it goes on sale. Sometimes, you can get good paint for over half off, maybe because it was mixed wrong for the customer. The key is to buy it when it goes on sale, even if you don’t need it at the moment. That way, you’re ready when a property turns over and you need to paint it.
2. Add an Area Rug
An area rug can add a lot of dimension to a room and can be purchased cheaply at your favorite home improvement retailer. And an area rug can play double duty by also covering up a stain or crack in the flooring.
3. Buy Bargain Appliances
When you think of cheap upgrades in your quest to be a frugal landlord, you generally don’t think of appliances. But this could be the most important upgrade you do. There are several strategies for buying bargain appliances.
- Try Craigslist. You can get amazing deals if you’re willing to pay cash and pick up the appliance.
- Shop at big box stores and take advantage of their incentives. You can sometimes get 0% financing for the first 12 months if you take out a credit card with your favorite store. A $1,000 refrigerator is a huge expense. However, by buying one and putting it on a 12-month payment plan with 0% interest, the monthly payment would be $83.33.
- Buy returns or scratched refrigerators for a gigantic discount.
Tip: Consider buying stainless steel appliances. A kitchen upgrade with new, stainless steel appliances can reduce your vacancy time.
4. Trim the Shrubs
Curb appeal is important. Trimming the shrubs and cleaning up the landscaping are cheap ways to make a good impression.
Right or wrong, people assume that if you don’t clean the outside of the property, you aren’t cleaning the inside, either.
5. Paint the Bathtub
If your tub needs to be replaced but you can’t afford it, try painting the bathtub. This method, however, doesn’t always work. Here is some further reading if you want to tackle this job.
6. Swap Out the Switch Plates
You can get a switch plate at a home improvement store for under 50 cents. If you find that the switch plates in your rental property are cracked, stained, or have some weird animal cartoon on them, it’s time to replace them with new ones. A bad switch plate can be an incredible turn-off for potential tenants and is a true frugal landlord fix.
7. Basement Renovation
You probably don’t think of a basement renovation as a frugal landlord tip. Although a full conversion from basement to finished space might not be, but repurposing your basement could.
Just by cleaning the basement up, even if it’s unfinished, can be a key selling point for tenants. Many people love the idea of having a “shop area” to work on things.
8. Replace the Front Door
The old adage of “you never get a second chance for a first impression” is true. If you’re showing a property with a cracky old door, some people might even refuse to go inside. If the door looks better suited to a haunted mansion, replace it before you scare people away.
9. Use Cozy for Rent Collection & Screening
Cozy might not be your typical home upgrade, but Cozy is perfect for all landlords, frugal or not, because it’s free and can get you better quality tenants.
With Cozy, you get a free website to market your property, and you can accept applications and payments online. This reduces your vacancy time and improves the profitability of your real estate business.
10. Clean Well
Having a property cleaned is absolutely mandatory. Even if a prospective tenant calls or shows up and says something like: “I don’t mind if it’s dirty. I can see beyond the mess,” or something like that, don’t believe them.
11. Add More Light
Lightbulbs are pretty cheap at the dollar store, so putting in all new lightbulbs for your properties is a frugal landlord tip. Increasing the wattage in your lightbulbs also improves the light more than you think.
This is one little upgrade that makes a huge difference.
Most upgrades you make at a rental property have a payback period of between one and three months. This makes your annualized return close to 200%. It might be tough to spend the money, but it’s also tough having a vacant property.
Did I leave your favorite frugal upgrade off the list? Tell me about it in the comments!