What to Look for When Designing a Rental Property

Tyler and Longview Real Estate Video Blog with The Burks Team

Investing in rental property is a great way to increase your cash flow, but where do you start? Cheryl Peterson is here to guide you through the process.

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There are a lot of people out there who are looking to invest in real estate, and many are interested in the opportunities for cash flow that rental properties provide. What should you look for in a rental property in the Tyler area? How should you design it?
Today I’m joined by Cheryl Peterson, the Chief Design Officer at Twin City Properties, to answer these questions for you.
Before deciding to purchase a rental property, Cheryl recommends making sure that you understand the neighborhood in which the property is situated. Pay attention to the kinds of neighbors around the property as well. Bad neighbors can shoot you in the foot more than the property itself, in some cases.
When you find a property in a neighborhood you like that you think is a little bit undervalued, then that’s probably the one that you’ll want to buy. Even if the interior of the property is underwhelming on the surface level and has bad flooring, old paint, and ugly wallpaper, pay attention to the bones of the property. How many bedrooms and bathrooms does it have? Is there potential for renovation and remodeling? Try and look for the potential, rather than what’s simply visible in front of you.

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Pay attention to the property’s potential, not cosmetic flaws.

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Budget is another important aspect to consider, especially because you’re investing in this property to make money. To determine how much to spend on the property, Cheryl suggests first figuring out how much it would rent for before renovations. After that, her rule of thumb is to add an additional $100 onto rent for every $10,000 worth of improvements. For instance, if renovations to the property will total $30,000, you will need an additional $300 in rent to make up the difference.
What are some of the most necessary improvements you should make to the rental property? Cheryl suggests looking at the electrical system and the plumbing first to make sure that they are up to par. Be sure to have some extra wiggle room in your budget to account for these unexpected costs. Because tenants don’t always treat rental properties the way they would a property they own, it’s important to renovate for protection. Cheryl recommends using vinyl flooring because it looks great and won’t absorb water or pet stains.
Painting the property is also an important improvement to make. A nice coat of white semi-gloss paint on every room is great for lower-end rentals because it’s easy to clean once the tenant moves out. For higher-end rental properties, two-tone paint is usually the way to go. This paint is more expensive, so it’s important to hire a professional to ensure it is applied correctly. Cheryl’s go-to paint colors are Sherwin-Williams Creamy for the trim and Sherwin-Williams Practical Beige for the walls. These two colors go with everything!
Hopefully Cheryl’s tips will help you when you’re looking for your next investment property. If you have any other questions about rental property design, give Cheryl a call at 903-561-2600. For any other questions related to real estate in the Tyler area, don’t hesitate to reach out to me. I’d be happy to help you!