When renting out a single-family unit, one rule of thumb is the rental price should be a fixed percentage of the purchase price—something in the range of 1 percent for most parts of the country.
Realities of the real estate and rental markets don’t always make it possible to attain that figure, especially in coastal cities. However, if you want to get as close as you can, try making some improvements to your rental property.
Start by using Cozy’s online rent estimation tool to gauge where you currently stand, and you’ll know how far you need to go to get there. You may find you have some work to do to get top dollar, but the improvements you need to make might be easier and less expensive than you expected. The ideal improvements are those that make the most impact on rental value while costing the least to implement.
1. Tidy up the front
Realtors will tell you that giving your home curb appeal is one of the most effective ways to make it attractive for buyers. That’s also true for renters. Here’s what to do:
- Mow the lawn.
- Trim back the part of the lawn that overlaps the driveway and walkway.
- Clean the driveway and walkway with a pressure washer.
- Tidy up the garden and hardscape.
- Plant some trees and flowers.
You might consider painting the house, but if that isn’t in your budget, at least paint the front door. It’s the first thing people see, and it makes an instant impression.
2. Add light
Darkness makes a room feel like a dungeon, but light opens it up and makes it feel welcoming. Add light to dark rooms by replacing small, outdated sash windows with larger sliding or casement ones.
Home Advisor’s 2018 average cost estimate for window replacement is lower than you might expect, about $500.
If the rental property is a brick building, or if there is some other circumstance that drives the cost of modifying windows out of your budget, you might consider placing a few mirrors in strategic places to augment light. Renters can always remove them after they’ve signed the rental agreement and moved in.
3. Provide quality amenities
Most people don’t want to move into a rental unit with a stove from the 1960s or a washing machine that makes bumping sounds. If anyone does, they won’t pay top dollar, or they’ll end up complaining if they do.
Quality appliances add value in two ways. One, they are more efficient than older, out-of-date appliances, so they cost less to use. And two, most newer appliances are equipped with technology features and smart functions that consumers who pay top dollar for a rental have come to expect.
Pay special attention to the kitchen. According to Consumer Reports, improving the kitchen is the number one way to make a house attractive to buyers, and this can apply to renters as well. Stainless steel is king when it comes to appliance finish, and stone, quartz, and faux marble outrank plastic laminates by a long shot in the countertop category.
4. Paint the interior and exterior
Painting is the easiest and most effective way to transform a property from shabby to scintillating, thus raising the rental price. Pay attention to both the interior and exterior of the property.
Outdoor colors that blend with the surroundings make a property feel more inviting and comfortable. Inside, it’s all about light. Don’t try to be an interior designer, because your tastes might not match those of your prospective renters. Keep the interior colors neutral and clean.
Related: Paint Walls a Neutral Color
5. Get the property professionally cleaned
A rental property should look and smell clean. The bathrooms, kitchens, walls, and floors should be spotless when you’re showing the property.
Odors left by your previous renters must also be gone.
- A coat of paint covers most odors that have accumulated on the walls, but sometimes it takes more than that.
- Check for mold and be ruthless about eradicating any that you find. Sometimes, that involves replacing drywall.
- Open the windows and leave trays of baking soda in inconspicuous places to absorb any smells left by the previous tenant.
- Do not spray fragrance to cover the odors. Many people find them offensive, and some people are even sensitive enough to get sick.
6. Raise the rent price incrementally
Unless the community in which your property is located has rent control, you can raise the rental price after a lease expires or, in most month-to-month rental situations, on 30 days’ notice.
It’s best to make a rent increase in intervals that make sense. Most people who sign a lease expect a rent increase before they sign the next one, and those on a month-to-month rental agreement also expect one periodically. Keep the increase small enough to encourage your renters to stay, and by the time they move out—if they ever do—the rent will have moved that much closer to your target for the property.
The bottom line
If you increase your rental price by a significant amount between occupancies, you should be ready for extra scrutiny. You’ll probably have to sink more of your resources into improvements, and the tradeoff in rent might not be worth it. Limiting your rent increases to keep your current renters not only avoids those extra expenses, but by encouraging them to stay, it creates a neighborhood. That’s what many renters, especially those with families, are looking for.
Let me know in the comments if you’ve used any of these tips to raise the rent, or if you have other techniques that have worked!