As a landlord, regular maintenance of your rental properties is crucial to keep them in good shape and maintain a consistently high occupancy rate.
To ensure your property remains rentable, renovations should be done within a reasonable budget. Overspending can prolong the time it takes to see a return on investment. Let us explore the most important rental property renovations and improvements that can add more value to your property.
Table of Contents
- Benefits of Renovating Your Rental Property
- Evaluate the Current Property Condition
- Determining Cost of The Rental Property
Benefits of Renovating Your Rental Property
Maintaining your property well can bring multiple benefits. This could be seen as an investment in the property. Investing in your place can keep your property competitive on the market. Let us have a look at some of the main benefits of renovating a rented property.
Increased Property Value
Fixing up your property might require some initial investment, but if at some point you decide to sell you could get a better price due to the renovations. So, it will increase its property value. Investing in your property means staying competitive in the market.
Higher Rental Income
If the place looks nice and has a good design, tenants often do not mind spending a bit more than they planned. They want comfort and a homely feel. So, if you keep your property well-maintained and make some improvements, you can earn more rent each year and get back the money you spent on upgrades faster.
Attract Tenants Who Will Take Good Care of Your Property
As you increase your rental, you will attract people who have higher incomes as well, are more responsible, and will take better care of your rental property. Most likely you would not have problems with property damage.
Evaluate the Current Property Condition
Before you start, make sure you go around the property and mark down the areas you think would need improvement. This is one of the most common mistakes landlords make before starting. Without properly assessing your property this renovation can become a financial burden that you wish you did not start in the first place.
Before you decide what renovations are necessary, make sure you determine how much rent you want to charge. To stay within your budget, it is best to track your expenses using property management accounting software, Use your previous expertise as a landlord and think about what features tenants are interested in when looking for a rental property.
Below are the most important aspects of your home that could increase your property value after renovating your rental property.
The kitchen can be one of the most costly parts of the renovation if this includes the appliances or the furniture is custom-made. However, opting to remodel the kitchen is a long-term investment.
However, if you are on a limited budget, you can consider some do-it-yourself (DIY) options such as repainting the furniture. Changing the knobs, tiles, and lighting can make a difference too. Sometimes only changing the countertop and fresh paint on the walks can already give a kitchen a better look.
A renovated bathroom can significantly boost the value of a rental property. Even if you are on a budget for bathroom renovation, making small upgrades like installing a modern showerhead or giving cabinets a fresh coat of paint can provide a renewed look without incurring substantial costs.
Additionally, tenants always look for storage when renting. Adding some wall shelves could add both styles and also could benefit attracting future tenants more easily.
Another thing you could do in the bathroom is to modernize with updated hardware and accessories. Replace outdated fixtures, add contemporary designs, and consider smart technology integration for a modern and attractive living experience.
Old flooring can make your apartment look worn out. Upgrading your floors is a great way to give your place a fresh and new appearance. The right flooring can transform the entire look of the property.
For rental properties, it is often a good idea to go for hardwood floors because they can last over time. This choice not only adds up to the overall look but also proves to be a durable and reliable option, saving you money in the long run.
While renovating the floors can be expensive, choosing to install a carpet is a more budget-friendly option that still adds a cozy and renewed feel. However, make sure you pick a tough material to ensure it lasts for many years without needing frequent replacements.
Determining Cost of The Rental Property
Increasing the value of your rental property is a strategic move to ask for higher rent prices. This can be done through property investments like renovations. Before hiking prices up, review any regulations surrounding rent increases in your area. As a landlord, there could be a yearly rental cap of how much you can increase the rent within a 12-month time period.
When making upgrades, you could use a simple calculation to figure out your total renovation costs. The 1% rule in real estate investing looks at the sum invested in the property against the gross income it will generate.
To balance costs, you might choose to do the renovations yourself versus spending money on paying a contractor. This way you will save a big sum of money you could use to make further renovations in the property.
In conclusion, being a landlord means a responsibility to keep your property in good shape. Doing regular maintenance and renovations can make your property more valuable and attractive to tenants.
By prioritizing renovations based on impact while staying within reasonable budgets, landlords can transform their properties to attract quality tenants while ensuring a good return on investment in a short amount of time.