5 Important Property Upgrades to Maximize Your Rental Income
- Properties are sound investments. Being able to make the most of your rental income entails a lot of property upgrades to make it livable and appealing for renters.
- Consider investing in quality upgrades for your curb, appliances, countertops, flooring, and fixtures.
- Read on to explore what you can do to increase your property’s rent rate.
Whether you own a condominium, townhouse, duplex, or single-family home, maximizing your income is always a high priority for an investor.
Implementing an excellent year-round maintenance checklist is a great way to protect your investment. It also lengthens the life of your HVAC unit and ensures your renter hasn’t damaged the property.
However, it won’t necessarily get you top dollar when competing against other properties on the rental market.
Your tenant has moved out, and now, your property is vacant. Before you do the typical make ready projects to rent out your home, put some thought into rental property upgrades.
The standard is to slap some paint on the walls, give it a good detailed cleaning, and shampoo the carpets.
However, doing the minimum will usually lead to minimal returns in terms of money and time of tenant occupancy.
When dealing with your rental property, there are three goals every investor looking to grow their portfolio should achieve:
- Maximum rent
- Minimal operating expenses
- Increased resale value
To get the best return on your investment, you will need to invest in the right upgrades. In particular, these are upgrades that will entice tenants to stay through multiple lease cycles.
As long as your rental home is structurally sound and in good condition, you only need to add a few upgrades to make your home stand out.
These upgrades will set your listing apart from others sitting on the market, and getting it rented faster will save you money upfront.
To appeal to a renter, you have to look at your property from their standpoint. Location is always key and is a significant factor when renters are searching for a home.
Aside from that, you’ll need to take a closer look at what features or upgrades will make a renter pay more money, stay longer, and take excellent care of the property.
We will cover the top 5 upgrades renters are looking for in a rental property and are willing to stretch their budget to get.
When you drive through a typical neighborhood subdivision, you can typically separate homeowners from renters pretty quickly.
It all starts at the curb: the first impression of a home and a spot most investors neglect.
Many investors forget to perform tasks like painting, fixing the fence, power washing the driveway, or even planting flowers or grooming shrubs and trees.
This is not a good sign to a renter and a potential reflection of how they see your maintenance style.
Yes, this goes for condos, townhomes, and high-rises too. Single-family homes are not the only places where curb appeal is a consideration.
In condos and townhouses, some property maintenance is out of your hands but you do have the power to complain and vote. You have a duty and obligation to ensure your monthly HOA dues are put to good use and that the board of directors is allocating enough funds for exterior maintenance.
Driveways should be free of potholes, the landscape should be well maintained, and all areas of the property should have ample lighting. The fences must work well, too.
Additionally, there are a few things you can do to spruce up your exterior curb appeal even in a condo or townhome.
Make sure all balcony and patio space is functional and safe. For unsightly patios, add green turf and make sure there are no overgrown weeds.
You might even add a patio table or extra lighting. Make sure your front door is painted, weather-stripped, and all exterior storage is clean and usable.
Appliances are among the first things a renter usually looks at after entering a potential new home. In some cases, it’s just as important as the location.
Old, half-functioning, and mismatched appliances will not get you value. With malfunctioning appliances, you will end up handling tons of maintenance calls.
Eventually, temporary fixes to your appliances will also lead to massive costs. Investing good, high quality, matching appliance packages with a warranty will save you a ton.
For instance, if your home is set up with washer/dryer connections, you can always add a set to increase the value of your rental property further.
Upgraded countertops add value to your kitchen and appeal to renters willing to pay more for upgrades. There are so many options to choose from that will add value and style.
Cement and quartz are popular in high-end markets, but granite is also a good choice. Invest in durability, functionality, and a style that will stand the test of time.
With cabinets, sometimes a fresh coat of paint and new fixtures will go a long way. However, if you have the old particle board cabinets that have outlived their usefulness, then you should upgrade to a more modern and functional option.
Remember, storage space is a hot commodity and an appealing bonus to a rental property.
Flooring is a tricky upgrade since renters have different opinions when it comes to flooring. It’s always a battle between carpets and wood flooring. However, the most optimal choice is wood flooring.
For this purpose, we are lumping all flooring together: laminate, hardwood, bamboo, planks, and faux wood. The options range from reasonable to pricey, but all flooring immediately raises the value and rent in a rental property.
A carpet is an item that may have to be changed after every other renter. This is expensive and has a negative impact on your annual rate of return. One Kool-Aid stain or bleach spill can ruin a new carpet forever.
However, some tenants like carpets, especially in their bedrooms and during winter. On the other hand, the majority of renters may have a carpet allergy or a child with carpet allergies.
Some owners opt for a mix of the two by putting carpet in the bedrooms and flooring throughout. Others opt for a blend of wood flooring and ceramic tile.
You most definitely should get rid of old vinyl or linoleum flooring in bathrooms and kitchens. It is unsightly, usually of lower quality than ceramic or travertine tile, and a major turnoff for renters.
There are some things you can do to give your rental property a more polished, pulled-together look. This includes investing in higher quality light fixtures, adding new ceiling fans, and upgrading all faucets from kitchen to bathroom.
It will also give the normal wear and tear items higher durability if you purchase a quality brand.
Tenants even notice door handles, locks, and window blinds. Spending a few dollars more to get the nicer 2- inch wood or even faux wood blinds adds a more lavish touch.
The benefits of adding rental property upgrades extend beyond appearances. You’ll be able to maximize your rent, improve your annual cap rate, enhance your home’s value, and make the majority of your expenses tax-deductible.
Most importantly, investing in upgrades will allow you to develop a healthy, legal relationship with your tenants. When competing in an active rental market, your property should stand out over other properties.
So, to get your rental property filled faster and to maximize the income on your rental investment, start with quality upgrades.