When a rental property needs renovation, it is not easy to cut cost while trying to maximize your return on investment (ROI). These tips may help you draw the best margin out of the whole project.
Rental vs. home
Whatever standards you would apply to your home should not apply for a rental. This may sound harsh and calculated, but the whole point is that there is no need to over-renovate the property or aspire to aesthetic perfection. The reason is simple – your tenants are not going to treat it with the same level of care as you would. For them, it is only a temporary home, and your most important goal is to make it look hospitable and livable.
Lend them a vision
Every time you give potential tenants a tour of the property, they are asking themselves if they can imagine themselves living there. You need to exploit this question and give them easy answers. For example, if it looks dark, you need to open all the shutters, turn on all the lights and maybe even strategically place a floor lamp or two for a more inviting look. If the space looks empty, stage the rooms with furniture. Rental furniture stores have different prices if you are renting per day, week or month.
Repair before you discard
Many landlords make this common mistake. Once they bid farewell to their previous tenants, they rush to clear everything from the unit, repaint the interior, spread the new carpets and welcome the new tenants. This order of events sounds sensible, but if the aim is to optimize expenses, it is worth remembering that you rarely need to overhaul the whole house. Carpets can be professionally cleaned, and new upholstering costs less than a new sofa.
Kitchen and Bathroom come first
People who are looking to rent often believe that the kitchen and bathroom can show if the home was kept clean and maintained. After all, no one wants to bathe in a moldy bathroom or prepare meals in a kitchen that seems to have time-travelled from the 1970s. So, if you plan to invest in your rental, those two are the best place to start. Eventually, if you decide to sell your rental in the future, a tastefully renovated kitchen or bathroom will yield higher ROI than anything else.
In many cases, replacing inexpensive fixtures can make your rental look well-kept and preserved. As you would replace the worn-out gearbox skirt and door handles on your car before selling it, you need to replace fixtures that wear out over time. These include door handles that stick, toilets that constantly run, old lighting, cabinet handles that have lost their finish, and faucets or tubs that drip.
Paint the walls
For aesthetic as well as hygienic reasons, you need to paint the walls every five years. Light tan is the usual choice for kitchens, while light blue or white work better in the bathroom. Experts recommend using Decorator’s White as the all-round color, as it contains a bit of grey and blends well with any other color.
Depending on the arrangement that you make with tenants, any renovation that will improve your property’s efficiency, may potentially maximize your ROI, even when the unit is vacant. For instance, investing in energy-saving windows will reduce the heating bills, and make the house more attractive for potential tenants.
When it comes to financing options, bundling several improvements (for instance, new efficient windows, insulation and a cool roof) into one project will save you money. Ygrene Energy Fund is the nation’s leading provider of residential property assessed clean energy financing, which helps homeowners invest in a greener and healthier environment. Check out this link to learn how to lower the cost of your home improvements.
Benefits of landscaping
While it is true that potential tenants would pay much less attention at the exterior, the front yard will be the first thing they see. The patch of land around the house needs to look clean and well maintained. You never know when a potential tenant might drive by, so the lawn has to be trimmed and edged regularly. Flowerbeds will make any house more inviting, and if you have bushes or young trees, make sure they are mulched. Weed between the pavement blocks and oil any creaking gates. Here are some other creative ideas to help you bring your yard to life.
When think about a rental renovation try to see it as a lot of little jobs, instead of one big endeavor. Make a list of those little to-dos and decide which ones are more urgent than the others. This way, you can finely regulate the overhaul expenses for your housing investment. Remember that tenants appreciate a functional and comfortable living space more than an over-decorated one.