There’s a reason real estate investing is so popular: it’s practical. Real estate is a tangible good, always in demand, and nearly always on the rise. If you treat your property correctly and make smart buying choices, there’s nothing stopping you from multiplying your investment in a matter of years. Over 80 percent of millionaires surveyed made their riches in real estate investing, at least partially, so what’s stopping you from making that money?
Your First Investment
When you first invest in real estate, you may lack confidence or initiative. You may hope to reap the rewards of your investment solely through the residual income of rent. There’s nothing inherently wrong with this, but think about the value of your property. If you could improve its value by just 10 percent, you’d immediately get a 10 percent return on your initial investment—plus you’d be able to charge 10 percent more for rent.
Still, finding easy ways to improve the value of your home can be time-consuming and intimidating. To start, try these five relatively simple ways to skyrocket your property’s value:
- Painting. Painting is one of the most cost-efficient improvements you can make. A fresh coat of paint in any room will give it a clean, updated look, increasing the perceived value and comfort of the property, and it won’t cost you much to accomplish. A gallon of paint costs around $25, and the supplies—rollers, tape, etc.—aren’t much, either. Best of all, it’s a job even a novice can handle with relative ease, so roll up your sleeves and get painting!
- Installing New Windows. New windows are a more intensive investment than a simple coat of paint, but they also offer a much higher return. Unless you’re a seasoned DIY pro or an installation professional, you’ll have to call in help here. The job itself may cost a bit—usually a few thousand dollars, but the job can add more than $10,000 to the overall value of your property. Plus, updated windows are a big selling point—the residual benefits of more efficient windows means reduced energy costs on a monthly basis, compounding that value over time.
- Landscaping. Landscaping is another job you can probably handle yourself—even if you don’t know what you’re doing. Adding some bushes, flowers, and other greenery can immediately increase the curb appeal of a house, and it will only take you a few hours and a few hundred dollars to get the job done. Moreover, you can trim hedges and trees to accommodate a better view (both from inside and from outside) and increase the value of the property.
- Updating a Bathroom/Kitchen. Remodeling your kitchen or bathroom can be as big or small a job as you’d like it to be. For example, simply upgrading a couple of your appliances and your countertops can instantly increase the value of your kitchen without costing too much money upfront. On the other hand, you could overhaul the entire room for a much more substantial increase in home value. Your decision should depend on how much capital you have to invest, how old the kitchen or bathroom in question is, and what other home improvement priorities you have.
- Replacing the Carpeting. Though it may not be one of the first improvements to come to mind, carpet says a lot about a house. Replacing it with a clean, modern style throughout the house can improve your home’s value immediately. If you take some time to learn the fundamentals, it’s a job you could feasibly do by yourself—but if not, the installation costs are reasonable compared to the return you’ll see.
The flip side to these improvements is obviously their upfront investment costs; you have to spend money to make money. Some of these, like painting, may be only fleeting expenditures, but major overhauls like updating a bathroom or kitchen can cost tens of thousands of dollars. To maximize your investment, mitigate costs:
- Do the majority of the work yourself
- Find local deals to reduce contracting or supply expenses
- Accurately budget your money so you know how much return on investment (ROI) you’ll see
These projects are somewhat intensive, especially if you’re new to the world of real estate, but ultimately, they’ll pay for themselves. Treat your new property with care and a commitment to improvement, and you’ll see multifold returns on your initial investment.