Rental renovation is a big decision for any property owner. Obviously, you want to ensure you will reap the benefits of such a costly expense but you also want to know that it’s what makes the most sense for you.
In this article, we’ll answer the question of should you remodel your rental property as well as provide you with some answers as to where to get started first.
In property management, attracting the right type of tenant is vital. This means being competitive with your listing, marketing your property properly, and making your rental unit stand out naturally.
One of the best ways to accomplish this is to remodel your rental unit. But should you take that step? When does it help? And what should you focus on if you do decide to start a remodeling project?
At some point, virtually every property owner takes a moment to think about what they can do to improve their properties, especially in a bid to attract tenants. Some choose to have professionals remodel the interior or exterior or do the job themselves.
It costs money, which may not fit into the budget (especially for a low-rent property), but the trade-off – a better-looking home that is more marketable – could be worth it.
Of course, you should only remodel if you think the added perceived value will either justify a higher rent or attract steady tenants and boost your occupancy rate.
Should you decide that the cost of remodeling is outweighed by the benefits – and that could very well be the case, especially in a competitive market – you can save money and effort by focusing on a few key areas.
For starters, adding a bathroom or bedroom (or transforming a room into a bedroom) can add a lot of value but could be prohibitively expensive. If this is the case, don’t worry; you can conduct limited renovations in crucial areas.
The kitchen and the bathroom are two key rooms that can benefit from remodeling.
Tenants are always looking for a bathroom that is up-to-date, which is why spending the money to remodel this space is always a good idea for rental property owners.
For bathrooms, focusing on surfaces also applies. This concept means your walls (like with tile) and your flooring.
Another huge selling point for bathrooms is maximizing the amount of storage space, especially in small areas. Remember that functional space, while being incredibly valuable, can be difficult to find in the rental market.
The kitchen is known as being the heart of the home, which is why, not surprisingly, renovating this space typically has an excellent return on investment. It could be as simple as replacing the appliances so they are all matching finishes or gutting it outright and starting from scratch.
For a true kitchen renovation, you’ll want to focus on the surfaces. For the kitchen, this means your appliances and your counters (as well as your backsplash).
Don’t forget about the cabinets. You don’t necessarily have to go and replace them in full. If they are still in mostly good working condition you could opt to sand and paint the existing cabinets for a more modern look.
Hardwood has and continues to be a popular flooring option. Not only is it ideal for renters, but for property managers, it’s also easier to clean. Carpeting can be challenging because it requires more maintenance and can trap odors.
If you do decide to install new floors, make sure you do this project last. That way, any of the dust and debris from your other rental renovation projects won’t impact your brand new flooring.
Don’t be afraid to knock down some walls to open up your space. Open floor plans are not only increasingly popular but also help to make your property feel bigger and brighter, overall.
Rental renovations don’t have to be major, it can be as simple as adding a fresh coat of paint and updating easy fixes to help brighten up the space. Consider things like new blinds, doorknobs, or cabinet handles.
First impressions are everything and for a rental home, the curb appeal of your property is going to be just that for any prospective renters. If you’re considering a rental renovation, make sure the landscaping and other exterior aspects are top of your list.
For more ideas, consider these helpful tips:
It goes without saying, but as a rental property owner, you should always prioritize fixing any maintenance issues. It’s easy to overlook some but if you’re trying to stay competitive, you must handle any concerns as quickly as possible.
As previously mentioned, space tends to be limited in rentals which is why maximizing storage is always an added bonus. Adding shelving can help to increase the amount of storage space in an otherwise limited area.
Believe it or not, something as simple as replacing hardware for something more stylish can make the world of a difference in a rental property. Thankfully, these swaps typically only require a simple screwdriver.
Remodeling money often comes out of a maintenance budget. For this reason, many owners will elect to keep that money in reserve in case they need to make a costly repair and forgo remodeling.
If your occupancy rate is high and your tenants are satisfied, you may not need to touch the home other than repair it. But, if you want to attract more attention or make your home more competitive in a tight market, remodeling may be the right call.
Consult with property management pros for more help making the decision and pursuing the project.
Hopefully, now, you no longer have to question whether a rental renovation is best for you. If you decide that it is your time, you now have a better idea of where to focus your attention in making your rental property competitive with the market.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.