How to Increase the Value of Your Rental Property
“Should I renovate my rental property?” might be a question that crosses your mind. The answer, if you hope to get more from your investment properties, is yes. Updating a rental property can involve everything from painting the walls to remodeling the kitchen and bathrooms.
Learn how to increase the value of your property in Central Pennsylvania. Discover the best renovations and improvement ideas to attract potential tenants and boost your profits.
1. Remodel the Kitchen
Even among non-cooks, the kitchen is the heart of the home and impacts its property value. A few adjustments can offer a cost-effective way to enhance the space's beauty and function.
For example, you could upgrade the drawer pulls and door handles, install a new backsplash or add a fresh coat of paint. According to the Cost vs. Value Report, upgrading a kitchen can have a return on investment (ROI) from around 30% to about 75% throughout the Middle Atlantic region.
2. Remodel the Bathroom
Next to the kitchen, the bathroom or bathrooms are the most important spaces in a rental property. Potential tenants are usually looking for an area where they can relax and unwind at the end of the day or for a space that will let them get ready in the morning with ease.
Like a kitchen renovation, upgrading a bathroom doesn’t have to involve making significant changes. Replacing worn fixtures or adding a fresh coat of paint might be sufficient for a rental property.
3. Improve the Floors
Some flooring types are better than others for rental properties. Usually, it’s best to switch to a durable material with low maintenance requirements that can withstand years of wear and tear from tenants.
Hardwood or laminate floors are often ideal for high-traffic areas such as hallways and living spaces. Water-resistant flooring, such as vinyl or tile, is often best in humid areas such as bathrooms and basements. Carpet offers sound insulation and warmth in areas that don’t see a lot of foot traffic, such as bedrooms.
4. Upgrade the Lighting
If you want to see your property value increase, buy quality lighting. Upgrading the fixtures can make a space brighter and refresh a room's style. Swapping out incandescent bulbs for LEDs modernizes your rental and helps your tenants save money on their electric bills.
Another option is to consider getting new, stylish windows. These investments can enhance a space's natural lighting to create a bright, airy atmosphere.
5. Increase Storage Space
When deciding how to increase property values, brainstorm ways to enhance storage. That can mean installing a closet in a bedroom or the living room. You can also offer a separate, secure storage area for each tenant in the basement of a multi-family building.
Even small storage improvements can make a big difference when it comes to how desirable and valuable your rental property is. For example:
- Attach hooks for hanging bags or keys by the front door.
- Add wall shelves to a bedroom or in the kitchen.
- Hang rods and hooks in the bathroom for towels and other linens.
6. Boost Energy Efficiency
Improving the energy efficiency of your rental makes the property more appealing, allowing you to ask for more rent. Increased energy efficiency shaves a few dollars off the unit’s energy bills, which helps you if you cover utilities such as heat or electricity and helps tenants save on their monthly bills.
To improve your rental properly's energy efficiency, you could replace older windows with energy-efficient models. Energy Star-rated windows provide insulation against cold air in the winter and reduce heat gain indoors in the summer.
As another option, consider upgrading older appliances. For example, investing in an Energy Star refrigerator can save you around $230 over the course of the product's lifetime.
How to Choose the Best Rental Property Upgrades
When renovating a rental property, evaluate its condition and determine how much you can afford to invest in the remodel or renovation. Older investment properties may need extensive repairs and renovations. Newer properties may only require small updates to increase the amount of rent you can ask for each month.
In some cases, it helps to weigh the cost of the remodel against the potential rent and resale values. For example, the Cost vs. Value Report indicates a midrange bathroom remodel may cost around $25,000 with an ROI of nearly 58%. Replacing windows averages about $25,000 and can bring in an ROI of around 56%.
Kitchen Renovation Tips
If you’re going to give the kitchen in your rental property a bit of a facelift, these tips will help you keep costs down while making the space look impressive.
- Rethink the materials for the counters. You don’t need to install pricey granite counters in your rental kitchen. Two budget-friendly, durable and attractive options include tile counters and engineered stone. Just as you want to skip the high-end counters, it’s also a good idea to avoid going too cheap with your materials — laminate counters may show signs of wear and tear much sooner than others.
- Leave the plumbing where it is. Unless the kitchen sink is in an inconvenient spot or there’s no room for a dishwasher with the current setup, you’ll save money and time leaving the plumbing alone.
- Go for classic over contemporary. Skip the unique patterns and colors. Choose visually pleasing designs that'll appeal to every renter.
- Focus on innovative storage solutions. Kitchen space is often at a premium, especially in smaller homes and apartments. When renovating, add hanging pot racks, install wall shelves or pantry storage and add pull-out drawers or shelving to existing cabinets.
Bathroom Renovation Tips
When completing rental property upgrades, you should focus on the bathroom. From large to small changes, there are a few things you can do to make the bathrooms in your rental more appealing.
- Replace the toilet. You may need to replace a toilet if it's worn out, runs continuously, uses excessive water per flush or looks outdated. If the toilet is relatively new, you might be able to get away with replacing the seat and cover rather than the entire fixture.
- Leave things where they are. As with the kitchen, you’re better off leaving the sinks, shower/tub and toilet where they are rather than trying to relocate them to a different bathroom area.
- Improve the showerhead. While you might not want to move the shower, replacing an older showerhead with a rainfall model can make the bathroom more attractive.
- Increase storage and counter space. Even if just one person lives in your rental property, the bathroom is going to see a lot of use. Increasing storage and counter space makes the room more convenient to use. Consider adding a medicine cabinet or a freestanding, humidity-resistant storage unit.
- Swap out shower curtains for doors. Consider replacing shower curtains with glass shower doors, which helps potential renters see how clean and tidy the bathroom is and leaves a good impression.
Additional Tips
Follow these tips to save time and money renovating the entire house.
- DIY as much as you can. You’ll get more bang for your buck if you tackle specific chores on your own. For example, you can pick up supplies from the store rather than pay for delivery. You might also be able to handle specific demolition tasks on your own. Painting and replacing handles and knobs are projects you can easily DIY.
- Reuse as much as possible. While some materials might be well past their prime and best left for the landfill or recycling, you’ll save money if you find ways to reuse materials. For example, you can refresh kitchen cabinets with a new finish or coat of paint.
- Maintain your changes. Keeping your property value high requires upkeep. Maintaining the property can mean scheduling regular tune-ups for certain appliances, such as the furnace or HVAC system, and scheduling regular cleanings for other fixtures and features.
4 Quick Ways to Update Your Rental Property
A significant renovation or remodel might not be in your budget or might not be something you have time for right now. While redoing the bathroom or kitchen and making other big changes can boost the value of your rental property considerably, a few small improvements can also produce decent results. Make your rental more appealing and more rentable by doing the following:
1. Increase the Curb Appeal
Don’t underestimate the power of a manicured lawn or a few flowers planted by the front entrance. It can be worth it to hire a landscaping company to visit regularly to cut the grass and refresh the flowers and plantings at the front of the house.
2. Install New Doorknobs
Just as replacing the door handles and drawer pulls in the kitchen and bathroom can instantly improve the look of the room, so can installing new doorknobs on the interior and exterior doors of the property.
3. Deep Clean
In some cases, items don’t need to be replaced, just deep cleaned. A professional carpet cleaner might be able to remove years of stains and pet odors from a carpet, for example. Scrubbing the title in the bathroom and cleaning the oven can make those things look like new.
4. Paint the Walls
While some tenants are willing to paint a rental themselves, you’ll get more consistent results and make your property more appealing if you paint all the walls between tenants. Stick with a neutral color, such as white or off-white, so you can appeal to everyone's style.
Work With a Property Management Company
Whether you own property that’s far from your home or just want help handling the day-to-day responsibilities of a rental property, working with a property management company can help you keep your property up-to-date and appealing for tenants.
To learn more about the advantages of property management services in central PA, contact American Heritage Property Management today.
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