Hi, there! Joe White here from Grow Property Management, your trusted property management company in Philadelphia.
Yesterday, I had an insightful conversation with a potential client who owns a home and is preparing to convert it into a rental property. He’s decided to hire my property management company, which I’m excited about, but before finalizing things, he wanted to express a concern that was clearly very important to him. Although he’s a highly intelligent and articulate person, he’s not an experienced real estate investor, so he struggled a bit to find the exact words. Still, his message came through loud and clear: “Is my home still going to feel like a home once it’s turned into a rental?”
At first glance, it might seem like a simple question about workmanship or tenant behavior. But what he was really getting at – though he didn’t use the word – was equity. He wasn’t just worried about bad tenants or sloppy renovations; he was concerned that his beloved home might lose its identity, its charm, its value. He feared it would become “just another rental,” and I fully understood where he was coming from.
This guy isn’t a flipper or landlord by trade. He owns a home, has disposable income, and is now stepping into the world of rental property ownership. What impressed me was how sharp his instincts were, even if he lacked the typical real estate vocabulary. His gut told him something important: that turning his property into a rental shouldn’t mean letting it go downhill. And he’s absolutely right.
When we talk about rental property investment, we typically focus on three key components: cash flow, tax advantages, and equity growth. Most people latch onto cash flow first—it’s straightforward. Your tenant pays rent, you deduct your mortgage and expenses, and the remainder is your profit. Then there are the tax benefits, which can be substantial—depreciation, write-offs, and so on. But the third component, equity, is often undervalued, and that’s exactly where this client was focused, whether he knew it or not.
Equity is what builds long-term wealth. Property values generally go up over time, especially in growing or stable markets. The longer you hold on, the more equity you build, and that equity can become a major source of wealth creation – what some would even call generational wealth. But equity isn’t just about time. It’s also about condition and perception. If a home becomes rundown, its value stagnates or drops. If it’s maintained as a desirable, high-quality home, its value appreciates steadily.
I see this all the time, especially in Philadelphia. I can drive down a street and immediately point out which houses are owner-occupied and which ones are rentals. The rentals often stand out – and not in a good way. They’re poorly maintained, neglected, and sometimes downright eyesores. And when that happens, it affects more than just the owner’s property. It drags down the whole neighborhood’s appeal and value. It creates a ripple effect of reduced equity for everyone nearby.
But here’s the thing: it doesn’t have to be that way. If a rental is treated like a home, it continues to look and feel like a home. It attracts better tenants – people who are willing to pay more and take care of the space. And when it comes time to sell or refinance, it performs better because appraisers and buyers see it as a valuable home, not a “used” rental.
This is why I always tell my team and my clients that we have to approach every property from multiple angles. We can’t just think about short-term cash flow. We have to think about the property’s long-term health and wealth potential. That means investing in quality materials and workmanship, even if it’s “just a rental.” And that mindset isn’t always popular in our industry.
For example, our paint supplier, Sherwin Williams, offers us discounted rates on paint. But they always steer us toward their cheaper lines because we’re a rental property management company. The assumption is, “It’s just a rental, why spend more?” Contractors come in and say the same thing: “Why are you bothering with this level of work? It’s just a rental.” That mentality drives me crazy, because it’s not only short-sighted – it’s wrong.
If you treat your rental like a second-class property, you’re going to attract lower-quality tenants, get less rent, and deal with higher turnover and more vacancies. And your equity? It’ll suffer. On the other hand, if you treat your rental like a home, you’ll attract better tenants, enjoy longer tenancies, and see the property appreciate in value. The financial rewards are bigger, and the headaches are fewer.
So while that gentleman might not have known exactly how to phrase it, his instincts were spot on. His concern wasn’t just emotional; it was economic. He understood, deep down, that if his property stops looking and feeling like a home, it loses far more than just its charm. It loses equity, desirability, and profitability.
That’s why I urge every property owner to treat your rental properties like homes. Maintain them with care. Invest in quality. Think long term. You’ll make more money, avoid more problems, and build real wealth. I may just be a humble property manager in Philly, but I’ve seen this principle hold true again and again.
As always, I’m here doing my best to answer your rental property investing questions. And remember: the best rental properties are the ones that still feel like home.
Happy investing!
