Curb appeal matters, even for rental properties

After a year of preparation, I started my rental property journey in mid 2019 with the purchase of a single family home in Alabama.  

It’s a cute 3-bedroom, 1-bath house in a working class area of Birmingham, purchased for about $92,000.  While a modest beginning to my rental empire, I celebrated it’s purchase nonetheless.  

Rental House #1

Stay tuned in a few weeks when I’ll post an update about how the property is doing, and how my empire is growing.

A learning experience

Buying a rental property was a completely different experience than buying a primary residence. I learned a lot and made some mistakes as well.  

I plan to bring my learning with me to my next acquisition.  But along the way, I also hope to share my experiences with you.

“Curb appeal” refers to the attractiveness of a house when viewed from the street. Here is why curb appeal matters, even for rental properties.

Plain house or ornate house?

Some argue that plain rental houses are better than ornate rental houses.  These people say that plain houses = less maintenance costs.  

I’ve listened to a few podcasts in which an investor states, “Give me a box with windows any day over a fancier house that breaks all the time!”

These folks certainly could be right that a plain home has less material maintenance costs.  But I think there are still a number of ways that curb appeal will actually make your rental more profitable, despite potentially higher upkeep costs. 

Pride of ownership

Pride of ownership is a win-win for both investor and tenant. 

A rental house that is more attractive will engender more pride of ownership on the part of the investor.  This may lead to a rental home that is maintained to a higher standard than an uglier home.  

A nicely maintained home will attract better quality tenants, who will hopefully share in the pride of ownership as well.  This can translate to a cleaner home with less holes in the walls and stains on the carpet. All of this then translates to less turnover costs in between tenants, and more profit for you, the investor.  

Less vacancy

Most tenants shop for rental homes online, where attractive photos are an important tool to lead more tenants to your doorstep.  A great picture of your appealing rental home therefore leads to more tenant interest and less vacancy in between tenants.

Vacancy is the cash-flow crushing bane of all investors.  So less vacancy equals more profit.

The exit strategy

What are your goals as an investor?  Do you intend to keep your rental homes until you die, and then pass it down to your heirs?  Perhaps you want to do a 1031 exchange to trade your property, tax free, for another real estate investment? Or maybe you envision selling your rental home to a homeowner to reap the rewards of accumulated equity and appreciation? 

If you never intend to sell or trade your rental house, perhaps curb appeal isn’t as important.  Similarly, if you only intend to sell the house to another investor, perhaps he or she will not care about looks.

But someone shopping for a primary residence will likely care more about curb appeal, just like you. More curb appeal means a higher offer price, and again, more profit for you.

Conclusion

While a more “attractive” house may take a bit more money to maintain than a “plain-Jane” type of rental property, I’d argue that the benefits of curb appeal more than make up for those costs.  From less turnover costs and vacancy to better exit strategies, a rental home with curb appeal is a more profitable investment.

–TDD

What do you think about curb appeal in a rental home? Comment below, share, and subscribe!

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Tyler Johnson
3 years ago

I agree that curb appeal would be important for rental properties. I feel like it would be even more important due to the amount of turnover. I’ll have to make sure to keep it looking nice if I decide to invest in a rental home.

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