Improve Your Property in 20 Steps | Wheelbarrow Profits

1. P r e s e n t s :

2. IMPROVING A PROPERTY Improving a property doesn't always involve major changes and a huge expense. Sometimes, it's the combination of smaller fxes that can really pull a property together. IMPROVE OR REPAIR Te changes you make will be classifed as either an improvement or a repair, and while both make the property more appealing to tenants, repairs typically aren't very expensive and are tax deductible for the year in which they're made, while improvements are more costly and are depreciated over the course of several years. Repairs, such as a leaky faucet or a broken doorknob, keep conditions livable but don't add much in terms of value to the property, but improvements, such as replacing a roof and replacing the electrical wiring, do add value. INTERIOR FIXES Once the outside is taken care of, we tackle the inside. We start by working on any vacant units that need to be “turned” as it's vital to get these units up and running to generate revenue. To start, these units need to be painted, carpeting and fooring should be replaced if it's old, worn, or damaged, all unattractive light fxtures need to be replaced, and all plumbing must be in working order. FROM OUTSIDE IN When it comes to what we fx on the property, we always start from the outside and work our way in for the pure fact that the outer appearance is what potential tenants see frst. If their impression is negative, they're not even going to make it through the front door. Change the perception of the property, and you increase the interest of potential tenants. THE HEART OF THE HOME Te heart of the home is the kitchen, and it's where we focus much of our efort. We replace countertops, change out sinks and faucets if need be, and update appliances if they're old and not working properly. Rather than replace entire cabinets, we try to repaint or reface them if possible. COMMON AREA On to the common areas, which include the basement, hallways, and laundry room. We install fuorescent lighting to reduce the electrical expense, and install photocells outside to control electricity usage.

3. 20 ITEMS TO FIX To follow is a list of the top 20 items that are benefcial to fx in order to make the property more appealing and retain quality tenants. Keep in mind while reading the below information that you only have one chance to make a great frst impression, so any changes that can be done are extremely benefcial. Mailboxes Tey're usually one of the frst things potential tenants notice when they pull up to the property, so ones that are damaged or rusty aren't going to be a very good sign. We suggest replacing all the mailboxes to maintain uniformity. Tey cost around $25 per mailbox, but can be priceless in terms of making a positive impression. DUMPSTER Te last thing you want is potential tenants pulling up and seeing an overfowing garbage dumpster that not only looks unattractive, but also smells. It's certainly not a positive impression. Our solution is to put fencing around it so it's out of sight yet easily accessible. We match the color of the fence to the exterior of the buildings to give the property a uniform look. Gutters You don't want rainwater puddling up against the building where it could eventually fnd a way to penetrate the foundation and create havoc in the basement, which is where gutters come in handy. Keeping gutters clear of debris can prevent water from pooling near the structure. Because gutters are so visible on a property, they're also one of the frst things that a potential tenant notices. We install white PVC gutters, but you can match the gutter to the color of the siding. landscaping Trimming the trees and shrubs, mowing the lawn, and trimming the weeds can not only revitalize the property and make it more attractive, but it can also let more natural light in to the units. We also install inexpensive shrubs around the property and water the lawn so the exterior looks clean and vibrant without 2. 1. costing a fortune. Paint 3. One of the easiest things you can do to massively increase the value and appearance of your property is to paint the facade. You'll be amazed at the transformation of your building once you've applied a fresh coat of paint. We begin by power washing the exterior to remove any dirt or rust from metal structures, then we add paint to stairwells, doors, and siding. We also add budget-friendly shutters to the windows to add a bit of contrast and decoration. Te vacant units get painted in a two-tone color scheme, the trim and doors get painted with bright white semi-gloss, and the walls get painted shaker beige. Tenants love the fresh clean look, and it's one of the least expensive ways a landlord can increase the perceived value. We've even had tenants move from their apartments that were lower in rent to newly turned higher rent apartments all because they liked the new 4. 5. paint job.

4. Driveway Sealing the driveway doesn't increase the value of your property, but it does add a fresh new look. It lowers the deferred maintenance on the property if performed every few years. Sealing adds a layer of protection from the elements and improves the appearance while increasing the life of the asphalt. Before adding sealer to the driveway, be certain to patch any holes. Once the sealer has been applied, you can re-stripe the parking lot. signage Tis is one of our favorite items to implement once we've assumed ownership. We like to change the name of the property to announce that the property is under “new” ownership. Tis is critical when repositioning a property that has a sub par reputation. Re-branding makes the new ownership ofcial and shows the tenants that things are about to change for the better. Signage includes relevant information such as the ofce location and phone 6. NEW OWNER 7. number. common areas Revitalizing the common areas is essential. Some landlords neglect these spaces, which include laundry rooms, club houses, hallways, stairwells, parking lots, and store rooms, because they think they lack importance. We view laundry rooms as a necessity for tenants, especially if the competition has them. We contract the service out to Coinmach and sign an agreement with them to service the units for a split of the revenue. Te company ofers an up-front incentive to solicit the business, and the landlord receives new machines and one less headache (and less expense) to worry about. maintained for liability reasons as well as for aesthetic purposes. We appreciate our tenants and the the business they provide, so it's only fair to ofer a clean, safe environment. It will also be easier to rent to prospective tenants if they see that the common areas are well maintained. outdoor Lighting Before you take over the property, take a trip at night to observe if there are any areas that are not well illuminated. Tenants feel much safer if the property is well-lit, and it will reduce a landlord’s liability if someone were to fall at night. We like to install photocells, which are lights with sensors that turn on in the evening and shut of in the morning when the they sense sunlight. It reduces the amount of electricity used and there's an assurance that the lights do turn on and of properly. We've used timers in the past, but found them problematic because they have to be re-programmed as the days lengthen and shorten. We install sensors in the hallway that turn the lights on when tenants enter, and shut of after a couple of minutes. You can even install sensors in the laundry rooms so the lights will shut of automatically when the rooms are unoccupied. Tis simple change means saving big when it comes to the 8. 9. Tese areas should always be fences & Railings We're still surprised when properties that are on the market have rusty railings or dilapidated fencing. Tese are easy repairs that cost very little yet yield substantial returns. A little paint, a little rust removal, and some power washing can do wonders for the aesthetics of a property. We start out by using a pressure washer to remove any rust from railings, then go on to paint the railings, doors, and shutters. Depending on the property, we may also install fencing. 10. electric bill.

5. cabinets Te kitchen is the most expensive, yet most advantageous, room to rehab in an apartment, so trying to fnd ways to save money is vital. It all depends on the type of properties in which you're investing. If you're investing in A or B properties, then you may be forced to install new cabinets, but in C properties, not so much. It's not usually necessary to replace cabinets, but to repaint or reface them instead. We either reface the cabinets or paint them white and change the knobs and handles. It results in a whole new look for the kitchen at a fraction of the cost. One of the biggest mistakes a new landlord makes is over-fxing a property. Our goal is to keep costs down while ofering clean, safe, and afordable housing that doesn't break the bank. flooring When you acquire a property, every apartment should be assessed to see if the fooring needs to be repaired or replaced. Unless the carpeting in the bedroom is in good condition, we replace it with vinyl wood fooring. If we decide to go with new carpet instead, we shop at the factory outlet to get it for a fraction of the price. Our long term goal is to replace all of the carpets with vinyl wood fooring. Tenants love the look and feel of it, and it's easier for us to maintain every time the unit is vacated. Carpets need to be steam cleaned and, over time, are more likely to get damaged. You'll typically fnd that tenants are willing to pay more in rent if the unit has vinyl fooring rather than carpeting. 11. 12. door ceiling fan exhaust Bathrooms that don't have exhaust fans to remove steam from showers are a breeding ground for mold. Installing exhaust fans will remedy this problem and add a modern look to the bathroom. Te installation process is inexpensive, and most tenants appreciate it, especially during the summer months. Tese fans can also double as a light fxture. 13. 14. hardware Tis is one simple area that most landlords overlook. After we fnish either re-facing or repainting the kitchen cabinets, we move onto replacing the hardware. Te knobs on cabinets show the most wear and tear and take a lot of abuse. For a few dollars a piece, your cabinets will look brand new. Considering doorknobs are used on a daily basis, replacing them can create a dramatic improvement. Window Treatments In addition to providing your tenants with added privacy, incorporating window coverings will allow you to collect more in rent. Coverings also add relief from the sun, protect the furniture and fooring, and instill a homey feeling. Tis is one improvement that will allow for a quick return your investment. We can charge an additional $10 to $15 per month for a unit with window coverings, yet they only cost around $150 to install. We recoup our investment within a year, and we have a happy tenant as well. 15.

6. countertops Tenants spend a great deal of time in the kitchen, which is why it's so important to have stylish, sturdy, and functional countertops. We'll only change the countertops if they're damaged or extremely unattractive. A and B properties will need to be furnished with granite or marble countertops, especially if the competition ofers this feature. In C properties, we can install inexpensive Formica tops. You'll be amazed at the quality of Formica tops that are currently light fixtures You can often tell the age of a property by the outdated light fxtures. Tis is another simple fx that most cheap landlords overlook. Go to a lighting store and select modern light fxtures for the kitchen and bathroom. Your tenant will thank you. 16. 17. on the market. Garage/ carport Tenants are more likely to favor a property that ofers them additional storage and/or parking room. Not only do they have a place to properly store their items or park, but as a landlord, you get the added beneft of having junk stored away instead of strewn all over. Te property will rent quicker and will always have more long term value. Practice frugality if you're reconditioning these structures. Te goal is to accentuate the exterior while providing security for the tenant’s belongings. Washers & Dryers Tis may seem like an obvious fx, but many landlords allow their laundry machines to fall into such disrepair that they become inoperable. Older machines tend to break down quicker, and most landlords don’t want to sink any more money into an old unit. Our solution is to sell all the old machines and bring in a laundry service company, such as Coinmach, which will furnish us with new machines and pay us an upfront commission. For around 50% of the revenue, they're responsible for maintaining the machines and emptying out the change on a monthly basis. We love the arrangement; it frees up our maintenance crew to tackle other jobs and we don’t have to worry about replacing machines when they decide to stop 19. 18. Utilities Our frst investment property that we purchased, a four-plex, had one electric meter that serviced the entire property. We would drive by and see the lights left on and the air conditioners running while the windows were ajar. We quickly realized that if someone wasn't paying for a service, conservation was the last thing on their mind. My solution was to have an electrician split the utilities and install separate meters for each unit. It was a painful solution in the short run, but we recouped my investment within three years. All of a sudden, the lights were being turned of and the air conditioner only ran on the hottest days. working. 20. A property where the landlord pays for all utilities is called All Bills Paid. We've learned to try to avoid this situation, unless the utilities can be split or the landlord can institute a Ratio Utility Billing System, which is a system where the landlord bills the tenants for their share of the utilities. Studies have shown that once tenants begin to pay for their own water usage, consumption drops by as much as 40%. Te arrangement, however, typically depends on the area. If the apartment complex down the street is paying for tenant’s utilities, chances are you won't be able to push of the utility expense to the tenants. Unfortunately, utilities such as water and heating oil seem to be increasing every year and results in a substantial percentage of a landlord’s expense. As a business owner, it's a huge risk when you have no control over those escalating expenses

7. RENOVATION INSPECTION CHECKLIST To help you determine what needs to be done, look over the below Renovation Inspection Checklist and check items of as you walk around your own property. EXTERIOR Good fix Replace Doors Windows Brick/Siding Paint Landscaping Walkways Driveway Curbs Garage/Carport Fences Roof Drainage Lighting Signage Gutters Balconies Chimneys Garage area Foundation Mailboxes

8. Good fix Replace Interiors Carpet Ceramic tiles Doors Drapes/Blinds Smoke detectors Electrical Water heater A/C unit Paint Good fix Replace kitchen Cabinets Countertops Stove Refrigerator Sink Dishwasher Garbage disposal Flooring Light fixtures Good fix Replace bathroom Cabinets Floors Tub/Shower Vanity Lighting Wall tile Wall paint

9. Good fix Replace living area Walls/Ceilings Doors Floors Light fixtures Outlets Windows Good fix Replace common areas Lighting Floors Washers/Dryers Doors Keep in mind that all of the aforementioned doesn't need to be done, but the more you can complete, the better it's going to be for increasing the value of your property as well as attracting new tenants and retaining the ones you have.