| The "Golden Rule" was an excellent idea as soon | | | | increased rent? |
| as Jesus said it; our lives would be so much | | | | "Will the market allow us to raise rents to cover |
| better if we followed it all the time. But it's not | | | | and profit from these expenses? |
| such a smart philosophy to follow it with rental | | | | "Can we effectively communicate this increased |
| homes. Let me explain. | | | | value in our marketing?" |
| There are many well-intentioned investors who | | | | The first problem is the ROI. In short, if you |
| believe that the "Golden Rule" should apply to their | | | | pay $2K to install granite countertops, how much |
| rental properties. "Do unto others as you would | | | | extra rent can you charge? The answer is |
| have them do unto you." Through the years, | | | | between slim and none. And slim just left the |
| I've heard: | | | | building. The reason? If your home is priced |
| | | | out of the market, no one will go look at it. And |
| 1. "I like granite countertops. I imagine that | | | | if they don't go look at it, they can't see how |
| tenants would also like to have them in my $75K | | | | awesome your improvements are. Pictures only |
| townhouse that rents for $550 monthly. | | | | go so far. |
| 2. "Once the tenant moves out, get started on | | | | The second reason is that it is too hard to |
| the new paint and carpet please. I would want | | | | effectively communicate extra value in rental |
| everything spotless and new." | | | | homes; attention spans are too short. People |
| 3. "Should we include all utilities in the rental price?" | | | | look for rental homes on the internet and are |
| Americans don't want average homes for | | | | clicking between hundreds of them. The main |
| themselves; they want distinguished trophy | | | | things people are looking at are price, number of |
| homes without any flaws. Unfortunately, trophy | | | | bedrooms and bathrooms, and the areas in which |
| rental homes with bells and whistles don't make | | | | the homes are located in. |
| money; average homes do. So the key is to | | | | So as potential renters are clicking expediently |
| keep your rental home average and | | | | through homes, they notice your home is listed at |
| undifferentiated? That doesn't sound like good | | | | $1,500 and another similar rental is listed at |
| marketing, does it? | | | | $1,350. Guess which one they click on? Yes, |
| Don't get me wrong, these would be very nice | | | | the cheaper one. |
| improvements that would make the rental move | | | | "But I have electricity, lawn care and cable |
| faster. My issue lies with 2 things: | | | | included! They would save money ultimately by |
| | | | taking my property instead of the one for |
| 1. The ROI | | | | $1,350!" Yeah, that's probably true. But to learn |
| 2. The way to effectively market the increased | | | | that, they need to read the house remarks |
| value in the internet age The question should not | | | | thoroughly and be a math major (and also know |
| be "Would the tenant like these improvements?" | | | | the typical bills that utilities in your area run). |
| Of course they would! Who wouldn't? | | | | That's way too hard. |
| Rather, the questions should be: | | | | The "Golden Rule" worked because it was simple |
| "Will the tenant pay for these improvements with | | | | to figure out. |