Taking your Investment Property from Drab to Fab – Episode 1
Like you, my wife and I are big believers in the long-term earning potential of owning residential rental property, and over the years, have built a small portfolio of urban properties. We love the vibrancy, diversity and walkability of Denver’s downtown neighborhoods and have enjoyed finding properties that allow us to offer comfortable, safe and well-maintained homes to those who prefer to rent.
Given their urban location, our properties are typically rented by younger, creative professionals. Yes, we rent to a lot of Millennials, but I bet you do too. According to the Colorado Division of Local Affairs, people 20 – 34 years of age accounted for 100% of the net migration into Denver County between 2000 and 2010!!! (see graph below) These are the potential tenants looking at YOUR rental property, and they have very specific expectations of how a home should look and function. Does your property meet their specific needs? If not, you are not maximizing your income potential.
In this blog, I will attempt to share experiences and insight I’ve gained on how to improve a property to meet the expectations of today’s urban renter. Some of the tips I share were ideas that my wife and I came up with as we spruced up a newly purchased property or refreshed on between tenants. Other ideas have come from property owners whose home I manage professionally as a Property Manager at Cliffdwellers Real Estate. Regardless of the source, our goal is to identify aspects of your property that are DRAB, and improve them in an intelligent, cost-effective way to make them FAB!
OK – So what do Millennials want?
Millennials want ‘clean’, yes…but don’t we all. Millennials want ‘space’ and ‘light’ and ‘value’, but again – all tenants are looking for those attributes in a rental. I believe what separates today’s urban renter from someone looking for a place in say, Highland Ranch is the desire to live “authentically”.
Urban neighborhoods are authentic and that authenticity attracts the creative, and the adventurist. These neighborhoods have history, character, grime and personality. They may not always be pretty, but they have an honest integrity, even those that are undergoing rapid gentrification. It is this vibrancy that is appealing to the young, and they want to not only live NEAR it, they want to live IN it. Your place should be as authentic as the neighborhood it represents.
How does this apply to your rental? Too many times I see a homeowner tear out the “old” and replace it with “new”, only to learn that they really tore our the “personality and integrity” and replaced it with “safe and boring”.
To illustrate this point, consider the following photos of two kitchens in adjoining units of an up/down duplex in the West Highlands. The previous owner had renovated the upper unit’s kitchen in the 90’s, but could not afford to update the original kitchen in the lower unit. While the “newer” kitchen is more usable and has better appliances, it does not fit the character of the home or the neighborhood. Prospective tenants typically prefer the kitchen in the lower unit. The quirky nature of the original cabinets and tile backsplash has an authentic character, which we’ve been able to enhance with modern fixtures and bold, period appropriate colors.
In following posts, I will share simple design elements that you can use to spruce up your urban rental while maintaining and enhancing the character. I will attempt to highlight smaller projects that can be accomplished quickly and affordably, without the need for a full renovation.
Stay Tuned…more to come on “Drab to Fab”!