When you own a rental property for a long time, there may come a time when you need to consider renovations. Whether the property becomes outdated or you come across safety concerns, small yet valuable renovations can help increase the value of your property and your cash flow. Today, we’ll go over six property renovations that can increase value and tips for renovating rental properties on a budget.
Contents of This Article:
- When Do You Need to Renovate Your Rental?
- Tips for Renovating Rental Properties on a Budget
- 5 Property Renovations That Can Increase Value
- Care for Your Rentals With Professional Management
When Do You Need to Renovate Your Rental?
Whether you’re buying a new rental property or want to upgrade your current property, there are several reasons you may want to renovate. For instance, your property may have experienced significant wear and tear from years of housing tenants, or you may want to increase the value so you can charge more for rent. Some other reasons for renovating rental properties include the following.
- Tenant Turnover- When tenants move out, it’s a good time to assess your property’s condition. If there’s significant damage or it looks outdated, it may be a good time to renovate certain areas.
- Safety and Compliance- Sometimes, renovation may be necessary to ensure the property meets safety standards and local building codes. Property managers in Northern Virginia can help ensure your property meets the right safety standards.
- Market Competitiveness- If similar rental properties in the area offer more modern amenities, renovating your rental can help it stand out in the market.
After all, landlords want to maximize their returns, and renovating rental properties can be an excellent way to do so. However, if your renovation won’t increase or maintain your property’s value or what you can charge for rent, you may want to take a step back.
Tips for Renovating Rental Properties on a Budget
Renovating rental properties can be quite expensive. However, if you want to save as much as possible and get the most bang for your buck, you’ll want to create a budget. Sticking to your budget can help you increase the value of your property without taking too much out of your pocket. Here are a few tips to consider.
- Set a Realistic Budget
- Focus on High-Impact Areas
- DIY When You Can
- Shop Smart for Materials
- Consider Cosmetic Updates
- Negotiate With Contractors
Set a Realistic Budget
Setting a realistic budget is key to staying on track while renovating rental properties. You don’t want to overspend on materials or renovations that don’t add significant value to the property. So, before setting your budget, research the costs of materials, labor, and permits for the renovations you plan to take on. Don’t forget to add a buffer for unexpected expenses.
Additionally, determine which renovations are essential and which are just nice to have. You’ll want to dedicate the majority of your budget to high-priority items that will add the most value to your property.
Focus on High-Impact Areas
If you want to increase the value of your rental property, you don’t have to renovate it entirely. Instead, you should focus your renovation efforts on areas that have the most impact on tenants. For instance, renters pay the most attention to the kitchen, bathrooms, and curb appeal.
Similarly, if you want to increase cash flow, you’ll want to choose renovations that offer the highest returns for your budget. Upgrading kitchen appliances or bathroom fixtures can give you a higher ROI than less visible upgrades.
DIY When You Can
If you want to save as much money as possible, consider DIY-ing certain renovations. First, evaluate your skills and abilities to determine what you can do safely and effectively. Painting, minor repairs, and simple landscaping are a few DIY-friendly examples.
However, not every project is DIY-worthy. If you’re planning major renovations, hiring licensed professionals is important to ensure the job is done safely and within compliance.
Shop Smart for Materials
Renovation materials can add up quickly. As such, you’ll want to compare prices from multiple suppliers to find the best deals. Remember to factor in shipping costs and delivery times while comparing prices. Additionally, look for discounts, sales, and clearance deals to save money on materials.
If you want to save money without compromising aesthetics, consider looking for alternative materials that offer similar aesthetics and functionality at a lower cost. For instance, laminate countertops can mimic the look of granite at a fraction of the price.
Consider Cosmetic Updates
You don’t have to spend a ton of money to make your property look better. There are plenty of inexpensive ways to improve the appearance of your property, whether it’s painting walls, updating light fixtures, or replacing outdated hardware.
Ultimately, it’s important to choose cosmetic updates that will most impact tenants for the least cost. For instance, a fresh coat of paint can dramatically transform a room without breaking the bank. Additionally, adding a backsplash tile in the kitchen to improve the overall aesthetic can draw potential tenants in.
Negotiate With Contractors
Hiring contractors is just one of the expenses you’ll incur when renovating your rental property. However, if you want to find the best deals, you’ll want to get quotes from multiple contractors. Additionally, negotiate with contractors or vendors on certain things like the scope of work or timeline to help lower costs. After all, contractors may be more willing to work within your budget if you’re flexible on certain aspects of the project.
5 Property Renovations That Can Increase Value
No matter what part of your rental you decide to renovate, it’s important that it maintains or increases the value of your property. After all, you don’t want to spend money on useless renovations that won’t help increase your income. Here are six renovation ideas that can help improve the value of your property.
- Kitchen Remodel- The kitchen is often considered the heart of a home, and upgrades can significantly impact its value. For instance, upgrading countertops, cabinets, appliances, and lighting can modernize the space and attract future tenants.
- Bathroom Renovation- Like kitchens, bathrooms are another important selling point for rentals. Renovations may include installing new fixtures, updating tile work, replacing old countertops, and improving ventilation.
- Energy-Efficient Upgrades- Investing in energy-efficient upgrades can not only increase the property’s value but also reduce utility costs for landlords and tenants. Some upgrades include double-pane windows, adding insulation, upgrading to energy-efficient appliances, or installing a smart thermostat.
- Curb Appeal Enhancements- First impressions matter for rental properties, so improving the property’s curb appeal can greatly increase its value. This may include landscaping, painting the exterior, updating the front door, and repairing the driveway or walkway.
- Smart Home Technology- Smart home technology is another excellent selling point for tenants. Integrating smart home technology like smart thermostats, security systems, lighting, and door locks can add convenience and appeal to potential renters.
Care for Your Rentals With Professional Management
If you’re looking to increase the value of your rental property, renovating rental properties on a budget can help you add value while saving money. Considering upgrades like kitchen or bathroom renovations, smaller projects like painting the interior or upgrading hardware, or enhancing your property’s curb appeal are all great ways to increase your cash flow.
Need More Advice? contact us today!
Do you want to ensure your properties stay up-to-date and appealing to potential renters? Consider hiring a professional property management company to help you stay on top of it all. A team like Bay Property Management Group can help identify areas of improvement, hire contractors to perform regular maintenance and repairs, and find quality tenants who will care for your property. Contact BMG today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
