Owning a rental property in Colorado presents a promising opportunity for both passive income and long-term financial growth. With a vibrant economy and population growth in cities like Denver and Colorado Springs, the demand for rental housing remains robust.
In Golden alone, the average home price increased by over $929,000 in July 2023, a jump of over 7% from 2022. As a result, buying an investment property in Colorado can unlock the pathways to tremendous profit-making opportunities.
However, as a successful investor, you should always think about ways to increase the profit of your Colorado property. While the value of a property may depend on the rental market trends of the area, there are other simple things owners can consider to increase their property value.
Here are a few value-boosting strategies that you can use to fill a rental property faster and boost the income on your rental investment.
1. Place and Accessibility Upgrades
Renovations that alter a unit’s layout or entryway to improve accessibility might come with a higher price tag. Still, they offer a distinct advantage over other upgrades by allowing for partial offset through tax deductions.
With the enactment of the Tax Cut and Jobs Act in 2017, the criteria for qualifying home improvement deductions have become more rigorous. Presently, deductions for loan-related interest are exclusively applicable to enhancements that increase the property’s value, extend its lifespan, or facilitate a new purpose.
However, modifications undertaken to enhance accessibility are generally eligible, though consulting a tax advisor is recommended to ensure compliance.
2. Upgrade Kitchen Finishes and Appliances
The kitchen holds a special place in homes, and you can increase its value without a significant overhaul. A survey found that homes with premium kitchen features sold for 30% more than expected. However, homes with fancy appliances like steam ovens, which gave the best return on investment, also took longer to sell. This suggests that while some buyers like high-end appliances, it might not be the best idea for all rental properties.
Instead, a smart move is to look at similar properties in Colorado to see what upgrades would help you compete better. The National Association of Home Builders says that stainless steel appliances, granite countertops, and wood cabinets are popular with homeowners and buyers.
Conversely, options like solid surface or engineered stone countertops, white appliances, and laminate cabinets aren’t as appealing. Making your kitchen better can raise the value of a rental property. To do this well, keep these things in mind.
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Change the Wallpaper
Enhance your kitchen shelves with removable wallpaper. With an extensive array of patterns and colors, you can effortlessly adorn cabinetry or fashion an engaging backdrop for open shelves. Opt for hues and designs that harmonize your kitchen’s aesthetics with the current decor.
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Turn Up the Brightness
Insufficient lighting can impact both the practicality and visual appeal of your kitchen. Consider installing fixtures, bulbs, or LED strip lighting beneath the cabinets to illuminate your rental kitchen effectively.
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Update Your Pet Policy
Studies show that pet-owning tenants extend their stay by an average of 23 months, a notable increase compared to the 15-month average among their non-pet-owning counterparts. Consequently, a pet-friendly approach can reduce vacancy periods and enhance rental income sustainability.
Landlords should consider incorporating a well-defined pet policy as a strategic move to capture a substantial tenant demographic and cultivate tenant loyalty, and reduce turnover. Such a policy can position your property as a sought-after choice in the competitive rental market while providing a win-win scenario for landlords and tenants.
3. Consider Bathroom Upgrades
A mid-range bathroom remodel demonstrates a more impactful increase in property value than an upscale remodel or adding an extra bathroom. For insightful design choices, tuning into home makeover shows can be enlightening. Homes featuring elements endorsed by television experts tend to sell more swiftly.
Notably, residences incorporating open shelving and subway tile sold an average of 9 and 10 days faster, respectively. Regarding fixtures, standalone tubs appeal to first-time homebuyers, particularly those with young families.
However, on the whole, 63% of homeowners exhibit a preference for walk-in showers. Assessing the costs associated with each option, considering available space, and aligning with the preferences of the local tenant demographic aids in determining the most fitting approach to undertake.
Employing these insights, implementing straightforward bathroom enhancements can markedly enhance your property’s market value while resonating with potential tenants’ desires.
4. Replace the Windows
A wise investment, especially for older buildings, involves upgrading to new windows. Installing modern, dual-pane windows can yield numerous benefits, such as reduced utility costs, minimized noise intrusion, and an enhanced visual appeal for your property.
Homeowners generally experience a substantial 73% return on investment through window replacement projects. However, it’s important to note that this figure can significantly fluctuate when replacing historic windows with newer designs that deviate from the home’s original aesthetics.
Interestingly, repairing window frames presents a viable alternative, achieving comparable energy efficiency improvements at a fraction of the expense tied to full replacements. In the context of rental properties, window replacement holds remarkable potential for increasing the property’s overall value.
It helps you enhance energy efficiency, aesthetics, and tenant comfort in a rental property. Additionally, upgraded windows can attract prospective tenants, enabling you to command higher rental rates and enjoy improved occupancy rates.
5. Team Up With Laurel Property Services Inc.
Boosting the value of your rental property is possible through strategic upgrades and tenant-centric enhancements. Making thoughtful yet impactful investments, such as incorporating new appliances or offering convenient amenities like a washer and dryer, can enhance your property’s appeal.
Furthermore, introducing value-added features like pet-friendly policies, allowing permissible property customization, and cultivating a positive landlord-tenant relationship through proactive reputation management can position your property as a standout in the competitive rental market.
If you need help in navigating these value-amplifying strategies, you can rely on the expertise of Laurel Property Services Inc. As a trusted property management company, we serve diverse locales across Colorado, including Golden, Wheat Ridge, Morrison, Lakewood, Arvada, Genesee, and more.
Our dedicated team possesses the proficiency to guide you through implementing these measures, ensuring your rental property reaches its full potential. Take a decisive step towards optimizing your property’s value by initiating contact with us today.
Connect with us at Laurel Property Services Inc. and empower your property with heightened value and potential!
