Considering adding different amenities to your rental property? Almost every landlord has been there, deciding whether or not it might be worth it to put in a new thermostat, laundry machine, or even build a pool in your rental so you can make more money. Now, these things aren’t required and usually aren’t even needed for you to get top dollar for your property. Which kind of begs the question, are they really worth it? Let's dive into the details and find out.
What is an Amenity?
An amenity is any feature or service provided within a property that enhances the tenant's living experience and adds value beyond the basic necessities. Amenities can range from physical additions like pools, gyms, and playgrounds, to technological upgrades like smart home devices, high-speed internet, and security systems. They can also include services such as concierge assistance, package delivery lockers, or community events. The primary goal of amenities is to make the property more attractive to potential tenants, often allowing landlords to charge higher rents and reduce vacancy rates. However, the effectiveness of an amenity depends on its appeal to the target tenant demographic and the overall return on investment it provides.
Pools
Starting with pools, they can indeed be a big attraction for potential tenants, especially in sunny Riverside. However, they also come with significant downsides. The maintenance cost for a pool can be high, and if you decide to pass these costs onto your tenants by increasing the rent, it can backfire. Tenants might prefer properties without pools to avoid the extra expense. Additionally, if you require tenants to maintain the pool, there's a risk they might not do it properly, leading to potential damage or additional costs down the line.
Smart Thermostats
On the other hand, smart thermostats are a relatively low-cost investment that can yield significant returns. A Google Nest thermostat, for example, costs around $130 at Home Depot. This feature is attractive to tech-savvy tenants who appreciate the convenience and potential energy savings. It can also be a selling point that differentiates your property from others on the market, making it easier to lease out at a competitive rate.
Laundry Machines and Refrigerators
The decision to include a laundry machine or refrigerator in your rental property is more nuanced. California law doesn’t require you to have these appliances in the property, which can simplify leasing and maintenance issues. Tenants often have their own appliances or prefer to use their own. If you do include these items, you risk them being poorly maintained, leading to additional headaches and costs for repairs or replacements.
However, in some rare cases, providing a washer, dryer, or refrigerator can be beneficial. If you already have these appliances in the property or have extra ones available, you can include them but stipulate in the lease that the tenant is responsible for their maintenance. This can be a nice perk for tenants without adding significant risk or cost for you as the landlord.
Evaluating the ROI
When considering any amenity, it's essential to evaluate the potential return on investment (ROI). Ask yourself the following questions:
Will this amenity justify a higher rent? If you can’t increase the rent enough to cover the cost of the amenity, it might not be worth it.
Will it attract more tenants? Sometimes, an amenity can help fill vacancies faster, reducing the time your property sits empty.
Will it reduce tenant turnover? Happy tenants are more likely to renew their leases, saving you the cost and hassle of finding new tenants.
Conclusion
In my professional opinion, the only amenities that are almost always worth it are smart thermostats and, in some rare cases, laundry machines and refrigerators. Pools, while attractive, often do not provide a good ROI due to the high maintenance costs and potential for damage. Other amenities like parking spaces, security systems, and high-speed internet can be beneficial depending on your specific property and target tenant demographic.
At PMI Riverside, we strive to help landlords maximize their rental income while minimizing hassle and expenses. If you have any questions about property management or how to become a better landlord, please feel free to contact me at jarrett@pmiriverside.com.
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