When Is It Time to Invest in Rental Property Upgrades?

Buying a rental property is a great way to earn passive income. However, knowing how to attract and keep good tenants is crucial if you want to keep your cash flow positive. One of the best ways to draw tenants in is by making periodic upgrades that keep your rental looking and feeling fresh. But how do you know it’s time to make rental property upgrades and which ones are best for your property? Today, we’ll review what you need to know about upgrading your rental.

Contents of This Article: 

• Why Should You Upgrade Your Property?
• When Is It Time to Invest in Upgrades?
• Best Rental Property Upgrades
• Upgrades That Waste Time and Money
• Keep Your Rentals Up-to-Date With BMG

Why Should You Upgrade Your Property?

If you own a rental property, there are several reasons why periodic upgrades can help the success of your investment. As property managers in Philadelphia, we understand how important it is to find and keep good tenants in your properties–and having an upgraded property can help. Some of the main benefits of rental property upgrades include the following. 

• Higher Tenant Retention- Most tenants want to live in a well-maintained property. Keeping up with maintenance and repairs, updating old fixtures or appliances, and adding desirable amenities is a great way to retain high-quality tenants.
• Increased Property Value– Upgrading your property not only increases its rental value but also its overall market value. This means you can potentially charge higher rental rates and list it for more than you bought it for when you’re ready to sell.
• Decrease Maintenance Costs– Certain renovations or upgrades can make maintenance easier and reduce the need for repairs. In turn, it can save you money on maintenance costs.
• Staying Competitive in the Market- Upgraded rentals are usually more competitive in the market, as they may attract a larger pool of tenants willing to pay more for an up-to-date property.

When Is It Time to Invest in Upgrades?

You know that upgrading your rental property is important–but when’s the right time to make upgrades? Sometimes, it’s obvious, like if the carpet is torn up or there’s significant damage somewhere. However, sometimes, they’re harder to decide on, like debating whether or not it’s time to switch out lighting fixtures. Here are a few signs that it may be time to invest in upgrades. 

1. Your Property Is Outdated
2. Increased Maintenance Costs
3. High Tenant Turnover
4. Poor Energy Efficiency
5. You’re Competing With Newer Rentals

Your Property Is Outdated

Has it been a while since you upgraded your rental? If so, it may not be as attractive to tenants as a newer property. Old-fashioned or outdated appliances, fixtures, or amenities can make a property undesirable. Upgrading appliances, flooring, or countertops can help increase appeal and make the space feel more modern. 

Increased Maintenance Costs

Do you find yourself constantly repairing the same things, like leaky faucets or malfunctioning HVAC systems? It’s time to think about upgrading. After all, it’s likely more cost-effective to upgrade these things altogether instead of paying ongoing maintenance expenses. 

High Tenant Turnover

If you’re experiencing frequent tenant turnover, it could be because your property isn’t meeting modern expectations. Simple upgrades like updated kitchen appliances, energy-efficient windows, or a fresh coat of paint could help attract and keep tenants longer. 

Poor Energy Efficiency

Do you feel like your utility bills are too high? Or are your tenants complaining about abnormally high bills? It could be a result of inefficient HVAC systems, poor insulation, drafty windows, or outdated appliances. If you’re having this issue, it might be time to invest in energy-efficient upgrades, like better insulation, new windows, and energy-efficient appliances. 

You’re Competing With Newer Rentals

In a competitive rental market, new properties may offer features that your rental doesn’t have. For instance, many investors are taking advantage of smart technology for their properties to help energy efficiency and overall convenience for tenants. However, if you don’t want to spend the money on smart home upgrades, you can also win tenants over with in-unit laundry or updated outdoor spaces. 

Best Rental Property Upgrades

If you’re looking for the best upgrades for your property, know that they don’t have to be expensive or over-the-top. You can do several small things to give your property a fresh look and feel. So, whether you’re trying to increase the value of your rental or attract higher-paying tenants, here are some things you can do. 

• Painting Walls
• Installing New Flooring
• Upgrading Lighting Fixtures
• Updating Countertops and Cabinets
• Buying New Appliances

Painting Walls

One of the easiest (and least expensive) ways to upgrade your property is to repaint the walls. A fresh coat of paint can transform a space and make it feel brand new. Remember to use light, neutral colors to make each room feel brighter and more spacious. Stay away from bold colors, as they may turn tenants away. 

Installing New Flooring

Installing new floors can transform the look and feel of a rental property. For instance, you can replace old carpeting with luxury vinyl tile, which is relatively cheap but looks great. However, you’ll want to research different flooring types and consider your budget and the nature of your property before choosing one. 

Upgrading Lighting Fixtures

Swapping out old lighting for energy-efficient lighting options like LED bulbs or lights with dimmers is a simple way to make your property more desirable. After all, newer lighting fixtures look great and allow tenants to save money on utilities–it’s a win-win!

Updating Countertops and Cabinets

Kitchen styles are always changing, and it’s a space that’s heavily used by individuals and families alike. So, whether you have an outdated kitchen or your countertops and cabinets look dated or old, it may be worth it to start looking for replacements.

Buying New Appliances

Nobody wants to live in a rental with old and inefficient appliances. That said, upgrading your rental appliances doesn’t mean buying the most expensive ones–and you don’t have to upgrade them all at once. Instead, you can invest in smaller upgrades like a new dishwasher or an in-unit washer and dryer. 

Upgrades That Waste Time and Money

While upgrading your property is important, not all upgrades are worth your time and money. Here are a few that you could probably skip on. 

• Over-the-Top Landscaping- While the outside of your rental property matters, you don’t have to get carried away with it. Every tenant is different, and some may not be interested in maintaining an extravagant landscape.
• Hardwood Flooring- There’s nothing wrong with hardwood flooring. In fact, it can make a good first impression. However, it’s expensive and requires professional installation, which adds to the cost.
• Luxury Appliances- New appliances are always nice and attractive to prospective tenants, but you don’t have to go over the top. New is great, but luxury isn’t necessary, especially if you’re upgrading multiple properties at once.

Keep Your Rentals Up-to-Date With BMG

Think it’s time to upgrade your property? Periodic rental property upgrades help attract more tenants, increase property value, and reduce maintenance and repair costs, saving you time and money in the long run. 

Need More Advice? contact us today!

Another great way for investors to save time and money is by hiring a rental property management company. Full-service teams like Bay Property Management Group can help with any aspect of your rental business, from property marketing to tenant screening, maintenance, and more. Contact BMG today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.