Many investors spend the first years of their careers looking for and purchasing properties for little or even no down payments. Several of such properties have not been properly maintained by their previous owners and desperately need to be repaired and brought back up to its true potential. Investors are able to increase value on such properties in many ways.
Raising Rent
Check the cost of rent in the area around the property that you purchase. You will usually find that the rent 
is considerably lower than the current market. Make a few improvements to the property, such as a fresh coat of paint on the exterior or fixing up the landscaping. At the same time, send out your rent increase notices.
Tenants will feel that they are getting more value for the extra expense. It is common to give tenants at least sixty days notice to allow time for them to look around and determine that, even at the higher rate, they are getting the greatest value.
Freshen The Property
Expectedly, when you raise the rent, several tenants will decide to move. This works to your advantage. Take the opportunity to make some repairs and additions to the property, such as new carpets or countertops. This will make the property appealing to investors that are more serious.
Rent To Own
Finally, once you have fixed up the property and increased the value as much as possible, offer the option to purchase the property when new tenants sign the lease. You can collect money upfront that you will keep should the tenants decide to purchase the property.
This will get your tenants thinking more like homeowners and less like renters. If they have the option to purchase the property, they are more likely to treat it as if it were their own.
In just a few simple steps, you are on your way to hanging up your landlord hat and becoming a serious real estate investor.
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{ 2 comments… read them below or add one }
Hi Sean,
Anytime you add value to the property you can charge more for rent. I think offering a lease option to new tenants is a great way to get them to actually care for the property as if it was their own.
Best case scenario is they buy the property and the worst case is they’ll take care of the property.
Is it possible to offer say an equity deal with your tenants where they pay more but have say a 20% cut of equity accumilited over a long lease agreement, this would also have them act more like owners than tenants.