Every real estate investor wants to see their property increase in value. While waiting for an upswing in the housing market can get the value to go up, there are some physical and immediate things that landlords can do to boost the property value of a rental home even more. We’re going to cover the best upgrades for a rental property to increase rent and your bottom line.
Unlike improvements in a primary residence, rental property improvements need to achieve a balance between investing enough to boost the value of the property and attract top tenants, and spending too much money on all the wrong things without seeing a return on the investment. The best rental property investments will increase the property value without over-improving it.
Why Upgrade A Rental?
Let’s state the obvious, higher rent. When you begin to make improvements to increase property value, you’re also giving yourself an opportunity for an argument to increase rent. With newer appliances, nicer floors, fixtures etc. people are willing to pay more for nicer things. A few other things to keep in mind when renovating your rental:
- Your Property Will Stand Out: When you renovate your property, you’re showing potential renters that you care enough to make it attractive to renters. Renovate to make your property as attractive as possible to potential tenants.
- Possible Improvement Of Energy Efficiency: By adding things like new appliances, changing up the windows, or thermostat setup, you can help reduce the cost of utilities. So, if you’re the one paying utilities for the property, it’s a big benefit to you.
- Overall Increase In Property Value: Improving the overall features of the rental property will increase the potential resale value.
- Major Tax Deductions: A lot of what you spend could be tax deductible from the property’s taxable income.
Best Upgrades For Rental Property
So, you’ve put your budget together and you’re ready to invest in your property a bit more to help increase its value. Great! Here are the Top 10 things to start to help increase your rental value.
Kitchen and bathroom fixtures like faucets, sinks and sprayers can get old and dingy very quickly, not to mention looking out of date. For fixtures that are around 10 years old, no matter what condition, landlords should consider changing them out.
A shiny chrome finish is currently associated with standard grade, so moving up to more refined finishes like oil-rubbed bronze or brushed nickel will boost the look of the rental property. Whatever landlords choose, they should make sure that all the fixtures are the same to bring harmony and unity to the home’s décor.
Of course, if you’re looking to do an overall renovation of something like a bathroom, you have to check out this video on how to do so on a budget.
The lowest quality countertops are the plastic laminate ones that don’t stay nice for long as they are subject to discoloration from liquids and burns. Over time, laminate countertops just don’t hold up.
Installing countertops made of granite, slate, quartz, or other solid surface material will boost the look of any kitchen and bathroom. Stone alternatives for countertops include acrylic/polyester composites, ceramic tile and stained concrete that are durable and beautiful.
Putting in a new floor in certain areas or throughout the rental property is an excellent way to boost property values. Replacing standard-grade carpet and linoleum with higher-end materials like laminate, tile, stone or even hardwood will not only add value, but it will make caring for, cleaning and repairing the floor so much easier for tenants and landlords. Here’s a handy guide on flooring options for rental properties.
Storage is one of the top priorities for renters, so landlords can really make their property shine by increasing storage options. Some small and simple ideas for boosting storage include adding hooks to key areas like entryways and bathrooms, installing closet organizing systems, and adding additional shelving in a pantry.
More involved storage rental property upgrades include installing permanent shelving in the garage, creating built-in shelves or in-wall storage, framing a new closet and adding a shed on the property.
Depending on the age of the rental property, it may be time to install new windows. Not only do windows contribute to keeping a property light and bright, but they are a critical part of keeping heat and cold at bay.
Landlords should consider upgrading to double-pane windows to provide better insulation and to muffle outside sounds. Other upgrade options include windows with blinds inside the panes or insulated windows.
When a roof reaches approximately fifteen years old, it’s time to consider getting it replaced. Neglecting the roof can lead to serious damage in severe weather. Who wants that call in the middle of the night that there is a leak in the roof and it’s currently damaging the inside of your property?
Landlords should have a roofing inspector check out the roof regularly and make arrangements to replace it on their recommendation. A quality roof not only looks good, but protects the investment beneath it.
Think about it, old dingy cabinets give off a vibe that they shouldn’t be well taken care of. Sometimes, the wood is so old that it gives off an awkward smell, or sometimes, it could be so cheaply put together that they fall apart within a matter of a few years. So, let’s break this down a bit more. If the cabinets are falling apart and cannot be repaired, it’s time to get new ones. Cabinets can be expensive, but are definitely worth the investment.
If the cabinets are old, but are structurally still intact and look good, maybe it’s time to get your DIY juices going and get out the paint or hire a contractor to do so. But, fair warning, make sure that you invest in good paint and take your time getting the project done; a bad paint job will only add more fuel to the fire on why you should now just get new cabinets in general.
What a good intro into one of the most underestimated things when it comes to increasing rental property value. Paint is super important! Picture: A renter walks into your apartment, the walls are painted burgundy and yellow and you want to charge $1500 a month. Now imagine that same renter walking in and the walls are painted a very simple cream or gray color.
It’s up to the latest design trends, as much as it can be, and you’re still charging that $1500. Which scenario seems like the best bet for that renter to sign the lease? My point is, paint can make all the difference and can create a lasting first impression, especially for someone who’s looking and ready to move into an apartment.
We’ll imagine the same scenario as above, but this time with curb appeal in mind. As mentioned, first impressions can mean so much, especially to a renter that’s ready and willing to sign a lease agreement. When a property looks as if it’s constantly being maintained because it has something like nice shrubs or grass that’s cut and trimmed, the renter is likely to feel that the landlord cares enough about the property to not let it go. And, with that in mind, cares enough about the property to check in on the tenant to make sure that they have everything that they need to make sure that the property stays intact how they left it.
Oh, the age-old question — do you supply appliances in a rental or leave it up to the tenant? For one, we know that appliances are going to up that monthly rent because it’s going to be attractive to tenants that they do not have to purchase their own. Secondly, if you were going to sell the property, appliances always add a nice touch to the seller’s description for the same reason it would be attractive to a renter.
Ready To Update Your Rental?
If landlords are going to be spending money on improving their rental property to attract higher-quality tenants and boost property values, it’s important to focus on the right things. A fancy kitchen won’t do much if the roof is leaking or the basement has mold.
Landlords should always start with taking care of the basics and then tackle the more cosmetic improvements down the road. Landlords should also avoid doing too much with the upgrades and over-improve. Putting in top-of-the-line flooring material, for example, isn’t a wise idea in a rental where the landlord has little control over how tenants will treat the home.
Landlords need to find that fine line between investing in their property and doing so much that they won’t ever benefit from the fruits of their hard work.