The rental market is surging amidst the current economic environment in the United States. There are more than 44 million rental units available nationwide. This figure is 870,000 higher than in the first quarter of 2020.
This comes as no surprise given the housing market's fundamentals. Home prices are still high and the U.S. Federal Reserve is aggressively raising interest rates. Mortgage rates are now higher than 7%.
Many prospective homeowners are turning to rental properties instead. There is growing demand and curb appeal is critical to landing the best tenants.
Read on for a comprehensive guide to rental valuation. Explore topics such as how to evaluate property and what steps could boost value.
How to Assess Rental Valuation?
There are many different tactics that investors use to assess their rental property's value. Some investors use the 1% or 2% rule. This basically says that the monthly rent should equal 1% or 2% of the property's purchase price.
Many use the sales comparison approach instead. This compares properties with similar features and square footage to assess value. The capital asset pricing model (CAPM) and gross rent multiplier approach are two other methods.
How Does Curb Appeal Impact Rental Properties?
First impressions are everything in real estate. A property with poor curb appeal is naturally going to turn off potential tenants. Everyone wants to live in a rental property that looks good from the street.
Discouraging demand is going to negatively impact rental value. Fewer tenants are going to express interest in the property. You may need to lower the monthly rent or offer favorable terms to land a tenant.
On the flip side, tenants are willing to pay more for a well-manicured property. You are likely to see strong demand and have more leverage to raise prices.
How to Boost Curb Appeal?
There are many actions to take to boost curb appeal in Orlando. Some of these tasks are affordable, while others are expensive.
For example, investors on a budget may decide to power wash siding and sidewalks. Those with a larger budget may replace exterior siding or lay down pavers.
Some tasks require little to money at all. You can declutter the yard and give the grass a fresh cut. Trimming back shrubs and planting some colorful flowers are also effective.
On the expensive side, you can add some hardscapes. Retaining walls, mulch beds, and paver walkways all look impressive from the street. Upgrading the front door is another worthwhile modification.
Replacing windows and roof tiles is pricey but sure to catch a tenant's attention. Many of these upgrades add long-term value to the property in addition to boosting curb appeal.
Your Guide to Rental Property Value and Curb Appeal
Now you understand how to boost rental property value by focusing on curb appeal. Cheap actions like power washing and planting some colorful flowers go a long way. The goal is to entice prospective tenants to come inside and see more.
If you want to learn more about rental valuation in Orlando, contact us today to speak with an experienced professional.