Читать книгу Property Management Kit For Dummies - Robert S. Griswold - Страница 94

When you’re considering making renovations and upgrades, you need to understand what they can and can’t do for you. Many times, renovations and property upgrades result in increased net income and higher property value. At other times, however, the benefits may not justify the investment.

To consider the payback of a proposed improvement, calculate the total installed cost of the upgrade, and divide that number by the monthly increase in rental income. If you install a dishwasher for $400 and consequently increase your monthly rent by $25, the payback is 16 months. Whether 16 months is an acceptable payback and worth the initial investment of $400 is something that you have to determine. Just remember that you’re not only increasing your monthly gross income, but also generating increased property value as a result of higher net income. The higher net income makes your property worth more to a buyer when you look to sell it.

Every real estate investor has different expectations, but generally, any payback of less than 24 months is good, especially when you look at the increase in property value that accompanies increased net income. See Real Estate Investing For Dummies, 4th Edition (John Wiley & Sons, Inc.), which I co-wrote with Eric Tyson, for more discussion of ways to increase the value of your rental property.

Not everyone appreciates or values the same features in a rental unit as you. This property is a rental property, and as the saying goes, “Beauty is in the eye of the beholder.” The features and amenities that appeal to you may not be worth the extra investment from the perspective of your target tenant market. Although you prefer expensive travertine floor tiles in your own home, for example, you may find that more-durable flooring products can tolerate the heavier wear and tear of rental units much better. Although cleanliness has universal appeal, features such as ceiling fans and microwaves may appeal more to some prospective tenants than to others.