You want to increase the value of your property as much as possible. One of those methods is to upgrade or alter your property in a way that increases the value and brings you profit whether you rent or sell the property.
By upgrading your property with add-ons (like bedrooms, bathrooms, and other extended areas), you add long-term value that will provide a return when you sell.
The first thing you need to do is make sure you’ll benefit from increasing the value of your property. For instance, if your rental unit is in an area where you can’t raise the rent without pricing yourself out of business, making major improvements will only make your tenants happy – it won’t generate more income.
You want happy tenants, but spending tens of thousands of dollars on a remodeling project isn’t the way to do it. If you’re looking for ways to make your tenants happy, consider smaller improvements like upgrading appliances, cabinets, and adding on-site laundry.
If you’re going to invest tens of thousands of dollars in your property, you should see a return of some kind; in Katy, you’ll see those returns.
According to Data USA, the median property value in Katy, Texas is $156,400, and the median household income is $71,739. Although property values in Katy are lower than the national average, the median property value increased by 0.06% between 2015 and 2016. That’s a good sign. It means there are homeowners in Katy who are proactive about increasing their property value, and you could be one of them.
Here are some of the most common add-ons that will add value to your property, regardless of whether you’re going to rent it or flip it:
A bedroom addition benefits you whether you plan to rent or sell your property. For instance, say you own a two-bedroom property for twenty years. If you added a third bedroom early on, your property value would increase at a higher rate over those twenty years. When you decide to sell, that third bedroom will net you a higher sale price. A third bedroom will also get you more rental applicants.
If you’re looking for a long-term tenant, you want a family to rent your unit. To attract families, you need at least three bedrooms.
Units with two or fewer bedrooms are less desirable to families looking for long-term housing. Most families want at least three bedrooms, even when they only have one child; third bedrooms are often used as an office.
Adding an extra bedroom to your property can allow you to charge higher rent. A master bedroom is often a deal breaker for the parents, and if they have to pay a little more for a master bedroom, they will.
Another way to create a bedroom add-on is to knock out the wall between two smaller bedrooms to create one master bedroom. Technically, you lose a bedroom this way, but you gain a master bedroom. If your house already has three small bedrooms, it will be more valuable with a master bedroom. You can always add another bedroom later. You might need to add more square footage to your property in order to create another bedroom.
According to Airbnb, the average host earns about $4,800 per year. Houston has an average of 3,700 active listings at any given time. In Houston, hosts earn about $50 per night for a single private room, and $331 per night renting out a four-bedroom home.
Renting your property through Airbnb is a viable source of income. However, before renting your home through Airbnb, be sure to follow all local and state laws; they change rapidly. For example, after Houston homeowners generated $11.1 million in untaxed revenue, the law began to change. As of May 1, 2017, all Airbnb hosts are required to pay a 6% hotel occupancy tax as part of a new agreement with the state of Texas. This tax isn’t just for the greater Houston area – it applies to the entire state of Texas.
Half bathrooms feel cramped. If you have the space to turn a half bathroom into a full bathroom, jump on it. Especially if it’s the only bathroom in the house. If you’re already adding another bedroom expecting a family to move in, one bathroom will probably be a deal breaker.
It’s best to have at least two bathrooms in a three-bedroom home. If one bedroom is a master bedroom, the other bathroom should be a full bath.
With the right strategies, it’s possible to remodel a bathroom on a budget. The trick is to work with what you already have as much as possible. For instance, reface the cabinets instead of replacing them. Another trick is to install vinyl flooring on top of existing tile, so you don’t have to pay someone to rip up the tile and dispose of it.
Small and stuffy kitchens are common deal breakers. If your kitchen space is closed off with walls, it’s not going to sell or rent as fast as it would if the space were open. If you can’t increase the size of your kitchen, you can cut through the surrounding walls to create open space. The difference is vast.
Anyone moving into a house will need space to store stuff they don’t want in the house. For instance, if they’re responsible for landscaping, they’ll need a place to store their tools.
Most people use shelves in the garage for storage, but if you don’t have a garage – or if it’s small – put a shed in the backyard. Sheds come in a variety of sizes and materials. The more expensive ones are made of wood and can cost upwards of $30,000, but you can get a plastic shed for less than $1,000.
Sure, a tenant can get their own storage shed, but that’s a hassle. Provide what they need, so they don’t have a reason to rent from someone else.
A property management company isn’t a physical add-on to your home, but hiring one will make it worth your time to make improvements to your rental property. A property management company makes your job as a landlord easier by taking the pressure and stress off of you.
Green Residential is a professional property management company that takes on the role of landlord on your behalf. We do everything from tenant screening, leasing, inspections, and maintenance. With more than 30 years’ experience, we know how to create happy tenants and satisfied landlords. Contact us today for a free analysis and find out how we can help you turn your Katy home into a profitable, stress-free investment.
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