Renovating Rental Properties: Strategies for Adding Value
When you own a rental property, you’ll need to renovate its units from time to time. Choosing the best time to start these sorts of projects might involve waiting for a unit to become vacant or planning to do the work when a tenant is away. Additionally, there are financial and design decisions that will affect the project.
With all of that being said, below are a few tips to help you plan your next rental property renovation:
Understanding Your Target Tenant
Before you plan the details of your rental renovation, you must consider who will rent the newly updated unit. If your rental property is near a university, you’ll probably end up renting to college students. In contrast, if your property is in an area that attracts retirees, you might attract seniors more than those of any other age group.
The reason why understanding your demographic is important is that you’ll want to update your rental units to meet the needs of your prospective tenants. As you research how to add value to rental property, you’ll find that adding safety features, such as shower railings and stairway lighting, will help you meet the needs of tenants in any age bracket.
As you plan a kitchen renovation or consider updating other parts of the rental unit, you might consider installing new technology as well. While younger tenants will appreciate the convenience of smart technology in the unit, older tenants might feel confused by it. You can meet the needs of any demographic by choosing technology and equipment that’s easy to use.
Set a Realistic Budget
Plan your rental property renovation around a set budget to ensure that you do not end up overspending on the project. The amount you’ll dedicate to the remodeling budget will depend on your reasons for updating your rental property. If you want to increase its value in the rental market, you may want to spend more on luxury appliances and high-end materials.
Instead of looking for a way to raise the property’s rent, though, you might want to save money by reducing your future property maintenance costs. In such a case, you’ll want to look at materials built for durability and longevity. One example might be to choose porcelain instead of vinyl when looking at shower and bathtub combos for a bathroom renovation.
In setting your budget, it’s also important to consider unexpected costs. It’s extremely rare to complete any renovation project without exceeding a tight budget. Construction contractors even recommend padding your budget by adding an extra 20% to the total estimated cost.
Additionally, don’t forget to add in the hidden expenses. In planning a renovation, property owners tend to forget to add in things like sales taxes on the cost of their materials. Unless you’re picking up the supplies yourself, you might also incur delivery or shipping charges.
Other hidden costs include building permits, disposal fees for removing old materials, and the cost of hardware. Make sure to research all of these costs before finalizing your renovation plans, and know that the experts at Home Outlet can help you create an actionable budget.
Prioritize High-Impact Home Areas
Adding value to rental property involves identifying the living spaces that will see the most impact from prospective tenants. A bathroom or kitchen renovation should take priority over renovating bedrooms or the dining room, as these areas suffer greater wear and tear than others.
Picking new kitchen cabinets by color will give you the opportunity to create contrast with the wall colors and help you create the impression of a bigger cooking space as you use cabinets to add more storage space.
It’s also important to think about replacement windows and doors if your rental property is older. Wood frames for windows and doors may have become cracked or weathered over time, leading to air leaks and higher energy costs. When you request a door and window replacement estimate from Home Outlet, you can compare the installation costs with the energy efficiency the upgrades will provide.
Choose Durable Materials
Take the longevity of the materials you choose for your renovation into account to reduce future maintenance costs. Get rid of low-cost carpeting that you’ll have to replace every couple of years, and instead look for more durable flooring options, such as ceramic tiles or hardwood flooring.
Consider durability in choosing other materials as well. Sturdier cabinetry for bathrooms and kitchens will help you reduce repair costs, and replacing incandescent light bulbs with LED bulbs will reduce ambient heat and put less stress on the electrical wiring. Upgrade the kitchen appliances and bathroom fixtures as well. More modern products mean greater energy efficiency, safety, and durability.
Maintain Your Investment
As you follow these renovation tips to upgrade your property, create a plan for maintaining the materials, equipment, and appliances you install. Consistent care will help you extend the lifetime of the products you use for the renovation. The beneficial result of good rental property maintenance is that your property will need fewer future renovations.
To keep up with maintenance, make a schedule for inspecting and servicing equipment, such as kitchen appliances, the HVAC system, and plumbing. Setting up alerts on your computer or mobile device will prevent you from forgetting important maintenance services.
In addition, conducting maintenance between tenant occupancies is also important. It’s the ideal time to clean the unit and repair any wear and tear damage your rental property has suffered through normal use. For example, knowing how to care for hardwood flooring during rental vacancies will add value to your free flooring estimate.
If you keep these tips in mind, your updated rental property will maintain the brilliance of its new look for many years, offering a fresh and welcoming atmosphere for each new tenant.
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