Following the dramatic spike in rent prices post COVID-19, Austin’s rental market is noticeably cooling. Rent rates are going down. Days on the market are going up, and the cost of make-readies remains high. Positioning your investment property to garner the highest rent with the shortest turn around takes skill and planning. Here are some things you can do to position your investment property above the market.
1. Rent terms: Pay attention to the length of your lease and plan accordingly. Spring and summer months are the high season in the real estate world. More potential renters will be shopping for their next home during this time of year and rent prices will be higher. As best as you can, plan to start and end your leases during these months. In some cases, it may be more advantageous to offer an 18-month lease to prevent a vacancy during the slower winter season.
2. Focus on the property’s assets. When it comes to marketing and repairs, concentrate on the qualities that set your property above the rest. In 2022, Austin built more apartment complexes than any other city in the United States. This influx of new build units has upped the competition for Austin property investors. Most apartments can boast high-end kitchens, and swanky outdoor pools/patios. But what they can’t offer is privacy. Outdoor areas, while attractive, are mostly shared. Front yards, garages, and driveways are often nonexistent. If you own a single-family home, concentrate on your niche. Capitalize on the private backyard. Fix the broken fence and allow tenants to have dogs. Replace the chain-link fence with a privacy fence. Make the front yard presentably nice. Power-wash the driveway and feature garage spaces in your marketing. If the property is located in a quiet neighborhood with established trees and sidewalks for safely walking pets, include that too.
3. Kitchens and Laundry: Kitchen and laundries deserve special attention because they are crucial selling features in world of property rentals.
It’s common knowledge that the kitchen is typically a home’s biggest selling feature. In response, many investors are tempted to compete with those high-end apartment kitchens. But this can be a serious mistake. Kitchen repairs can quickly escalate into the tens of thousands of dollars, and many fixes aren’t worth the return on investment. Before you start knocking down walls, think critically about what fixes you can do to give the appearance of value. Most tenants don’t know or care what dishwasher brand is best. They aren’t going to notice if the kitchen cabinets are custom-built or stock. Focus on providing an attention-grabbing “wow” feature instead. These points of interest give the appearance of added value, and they have the potential to give you much bigger returns in rent. It goes without saying that if your kitchen needs an overhaul, if the cabinets are destroyed, the plumbing is leaky and it smells bad, then then address those things first. But if your kitchen is in relatively good shape, and you find yourself being left behind by the competition, consider adding a trendy backsplash or a feature wall with faux brick or stone rather than a full kitchen renovation. Just remember, you’re looking for cost-effective upgrades. Boutique home décor stores are not the solution here.
While laundry rooms aren’t as glamorous, they carry some major weight in the home selection process. Many apartment complexes offer shared (thus inconvenient) laundry areas. If you have a laundry room, feature it in your advertising. Spruce it up. Install shelving and give it a new coat of paint. Make it as inviting as you reasonably can. But be warned. We’ve found that including a washer and dryer is a liability and usually costs owners more money in the end. Tenants are typically satisfied with washer/dryer hookups, so leave your appliances out of the mix.
If you’re interested in purchasing an investment property, or you’d like to put your current portfolio in expert hands, Neighborhood Realty and Property Management has been one of the top-producing rental property management companies in the Austin area for more than 30 years. We’d love to help you reach new levels of success!