24 Jan Rent Rate
How To Capture Higher Profit Margins
Thanks to rising interest rates and shrinking inventory, the rent rate in San Diego will continue to pick up. While this may sound like a landlord’s dream, this is no time to be complacent. Knowing how much to charge for rent even in a landlord’s market, is as important as air is to your lungs. In fact, since housing is already scarce, tenants in the San Diego area are looking for more amenities. Put simply, your kitchen can’t just be functional, it has to have the WOW factor.
According to the Bureau of Labor Statistics, with the exception of sleeping and watching TV, most American’s activity is centered in the kitchen. Not surprisingly, kitchen and bathroom remodels offer the best ROI for landlords. For this reason, if you want capture higher profit margins for your rentals in San Diego. Updating the kitchen with stainless steel appliances, and making sure other cosmetic changes are in line with other rentals in the area is necessary. With this in mind, we offer insight how to capture higher profit margins by maximizing your remodeling dollars.
Breaking Through Conventional Thinking
Conventional thinking says, you should charge the same amount of rent as other rental listings in your area. But a better approach, might be exploring ways to capture higher profit margins by maximizing your remodeling dollars. Because if you want dominate the rental market in the San Diego area, you may have to update the kitchen and the bathrooms. Have you ever heard or greige (grey-beige)? If your answer is no, it may be the kind of detail you need to know if you want to get market (or a higher) rate for your San Diego rental property.
Kitchen and Bathroom Remodels
Kitchen and bathroom remodels may offer the best ROI for landlords. That’s because, renters see value in these rooms. Kitchen and bathrooms have a bigger WOW factor when prospective renters are viewing a property. And, while other rooms can be changed with design elements, you get what you see in a kitchen or a bathroom.
Let There Be Light!
If there is one thing that is sure to turn off prospective renters, it is dull or dark spaces. By doing some simple things like painting the walls and ceilings, cleaning the windows, and adding lighting in spaces that feel dark. You can turn a dark dull room into one that is full of life. From small lamps along walkways to adding lighting to backyard spaces. You would be surprised just how much light can impact everything. Especially when you consider tenants who like to entertain. It is the small things the little details that will set your rental apart from the rest.
Great landscaping can increase curb appeal of a rental. But, it does not increase the rental rate or deliver the ROI you will get from better appliances or refreshing your interior paint. So, unless the yard is in bad shape. The Landscaping should be low maintenance, and the last item on your remodeling budget.
San Diego Rents
The amount of rent you charge your tenants should be a percentage of your home’s market value. Typically, the rents that landlords charge fall between 0.8% and 1.1% of the home’s value. While this may be a good starting place, it does not take into account other factors that add value to a rental property. Remember, the right price for a rental property is a balance between wanting to maximize your income from rent payments. And, wanting to ensure the rental is continuously occupied by good trustworthy tenants. For this reason, consider how remodeling the kitchen and bathrooms can help you get the price you deserve!
Hiring A Property Management Company
If you need help determining a rental rate, or need help maximizing your remodeling dollars, call us today! We offer a wide variety of maintenance and remodeling services. Our contractors cover a broad range of trades and are rich in talent and professionalism. So, whether you are thinking about changing property management companies or hiring one for the very first time, we can help. We manage all types of residential rental properties including homes, condos, multiplexes such as duplex and triplexes, and even small apartment buildings. Let us manage your rental properties, so you can enjoy your life! Call us today at (858) 576-2176. We will save you time, money, and the stress that comes along with managing your own rentals.