The Best Renovations for Your Rental Property
Renovating a house to be used as a rental is very different than remodeling it for a quick flip. You are looking to have a buy and hold property that will be appealing to a wide range of renters, while also standing up to the rigors of multiple tenants over a long period of time. The strategic upgrades you make for maximum rental appeal may differ from what you would do if planning to sell it. It’s important to have a strategic priorities and a smart budget when planning rental property renovations.
Rental property owners will want to budget carefully and spend their money on things that will maximize their return on investment and cap rate without breaking the bank. Remember that your overall income will dependent on long-term success through good property management, proper rental pricing and low vacancy rates.
Here are some renovation tips for rental property owners. We feel these are the 6 best renovations you can make:
The most important room in any home renovation is almost always the kitchen. It is the heart and soul of the house. It is also the room that tends to get the most outdated with old appliances and design features that go out of style. Your rental renovation plan will likely include kitchen upgrades. Look at the cabinets, think about investing in new countertops, incorporate low-maintenance features that tenants will love, and of course, replace any old/damaged appliances that need to be updated.
Second to the kitchen is the bathroom (or bathrooms, if more than one). Bathrooms get the most use and are the scariest part of the home for a renter. They don’t really want to know what took place in there before them. The more run-down a bathroom is, the less appealing the house will be. When renovating, pay special attention to the appearance and functionality of all bathrooms to make them as inviting as possible. Upgrade toilets and fixtures. Also make surfaces in showers, sinks and tubs easy to clean. This way, it’s much easier to clean up and turnover the property in between tenants, even if the old tenant didn’t take great care of it.
Don’t neglect the exterior of the home. Curb appeal is what will first attract a quality tenant if it looks like a nice house from the outside. Plant new grass or lay new sod if there’s a yard, do some landscaping and gardening, make the driveway, parking area(s), porch and entry door as clean and inviting as possible.
Unless the old flooring is spectacular, new flooring is usually a must in any rental property renovation. Like the bathroom, think about flooring surfaces that look nice, but more importantly are easy to maintain. Laminate flooring is much easier to take care of than carpet, and it’s cheaper and easier to replace/repair than hardwood. Carpet is usually the least expensive option, but it gets ugly over time and no amount of deep cleaning between tenants will make a difference.
Definitely focus your limited time and budget on easy repairs and easy upgrades. Add a fresh coat of paint, clean the windows, remove old wallpaper and cottage cheese ceilings, and add some new light fixtures and switch plates. Keep the colors and design elements neutral so that the renter can have their own blank canvas. When they move out, then the house can be cleaned up again and provide a fresh neutral palette for the next tenant.
Think about common amenities that all renters will love to have. A good dishwasher, washer/dryer (or at least hookups to install their own), air conditioning system, ample storage space, outdoor spaces, fenced-in yards for pets, convenient parking for guests—these are just a few of the things you can focus on to make your house as appealing as possible.
You have to put yourself in the mind of a renter, which is different than the mind of a buyer. This is how you effectively budget and plan out a renovation that will make your buy and hold rental investment as fruitful as possible for many years to come. Ideally, you should only have to renovate once to create a healthy foundation and then it might be periodic minor upgrades and repairs from there.
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