Long-time landlords and experienced property managers will tell you that renovating a rental is quite different from renovating your own home. Having a good understanding of the local market will help, as it will enable landlords to make decisions that will offer financial benefits for years to come.
Instead of focusing on trends, landlords who want to maximize their investment should be planning for renovations that keep their property value high, and enable many different tenants to live there comfortably. Renovations in a rental require a different set of skills, and can easily spiral out of control unless you’re willing to put in some effort to learn about your local rental market and the features and amenities that sell well in your area.
Today, we’ve partnered with our friends at Goldmar Property Management to bring you a list of points that you should consider when renovating your rental property. As long-time property managers, they know the rental market well, and their close relationships with both landlords and tenants enable them to make sensible and financially healthy recommendations on which renovations and upgrades will offer the best return on your investment.
Here are the points they recommend considering before renovating your rental property.
1. Does it add value?
One of the key benefits of renting out your investment property is to secure a passive, predictable income stream every month. There will already be fixed costs associated with your property, such as property tax, mortgage payments, and insurance. The key is to put enough money into the property to ensure that the amount you receive in rent is higher than your fixed fees.
Ultimately, the best renovations are the ones that elevate the value of your home and help ensure a better return on your initial investment through higher monthly rent payments, or just time in the market.
Kitchen renovations and bathroom upgrades are always a good investment, as these are typically the first places potential tenants want to evaluate on a house tour. Replacing outdated fixtures, improving the cabinet design, and getting rid of scuffed and worn flooring are all great initial projects for a rental property that needs some work.
2. Focus on longevity, not trends
Staying close to trends might be a key renovation goal when you’re making upgrades to your own home, but it’s the wrong attitude to have when you’re renovating a rental. Instead of focusing on trends that will ultimately make the house look dated in 5 to 10 years, invest your money into durable, hard-wearing materials that are easy to clean and maintain.
One prime example is the trend of doing white-on-white bathrooms, with gleaming white fixtures, tile, and sink. It may look great in photos, but it doesn’t wear well and shows dirt and grime easily. After a few tenants have passed through, it will definitely show its age.
3. Stick to your budget
When you’re just starting out, it’s easy to get overwhelmed by the options and convince yourself that any upgrade will pay off in the long run. That’s a quick way to shell out double or even triple what you had initially intended to spend.
To combat this, create a plan for your renovation, then make a budget. You’ll be able to see clearly what you can afford, and when you should stop. This will ensure you don’t get tempted by visions of renovations that you don’t need, and can’t afford.
4. Can you DIY it?
There will be some upgrades that you can easily do yourself, and others that are best left to the experts. Once you have a plan for your renovation, take a look at the list of tasks, and take on whatever you can based on your skill level. However, don’t give in to temptation to take on projects that are beyond your abilities.
Painting, putting down new laminate, and doing basic plumbing maintenance is easy enough, but once you get into complex construction projects, electrical wiring, or anything requiring demolition, it’s a good idea to bring in the experts.
5. Add amenities that are popular in your area
Another great way to maximize your income property investment is to add amenities that will increase the value of your home. Your priorities for what to tackle first should be based on what’s most desirable in your area.
For example, air conditioning is a must-have in Miami, but may not be as useful in a place like Montana. If you’re working with a Windsor property management company, they can help you determine the most desirable amenities in your area. Some popular ones locally include a dishwasher, fenced-in yard, built-in storage space, or an in-unit washer and dryer.
6. Focus on environmentally friendly materials
One trend that’s worth following is the growing movement of opting for environmentally friendly materials and building practices during renovations.
You can easily save money and the environment by shopping for salvaged or second-hand building materials. You can also choose paints without volatile organic compounds (VOCs), which are terrible for the environment and can irritate people with chemical sensitivities. Making your rental property more environmentally friendly is a great differentiator and will help attract tenants who prefer to live a greener lifestyle.
Let the Staff at Duby’s Home Centre Help Upgrade Your Rental
Looking to invest in some upgrades for your income property? Let the staff at Duby’s Home Centre help you pick the best materials specifically for rentals. Whether you’re putting in durable new flooring or modernizing your cabinet design for a more intuitive layout, we can help you get everything you need to succeed.