One question we frequently get from landlords is what can be done to add value to their rental properties. Last time, we discussed how to upgrade your kitchen to improve the quality and achieve a higher rent. This time, we’ll go over a few items that do not add much value to a rental property and won’t bring much return on your investment. Let’s take a look:
Rooftop decks are usually a fun and cool feature that are likely to be a positive selling point when bringing prospective tenants on a tour of the property. But the real question is: will a rooftop deck add value? Probably not. First, in most cases, these end up only being used occasionally by a handful of tenants while the weather is great but otherwise sit unused. In other words, your tenants might be wowed by the deck on the tour and then never revisit it.
The second—and more significant—concern is the cost to build and maintain a rooftop deck. While every project is different, the expense can be anywhere between $4,000 and $16,000, and sometimes more. Plus, most roofs are not made to hold the weight of people, furniture, and other decorations and must be engineered to do so before construction can begin. The carpenter will also be required to punch holes in the existing rooftop and siding—both of which will allow water to enter the building if not properly maintained. The remodeling cost versus value is not ideal.
Lastly, having people on the roof of your building can be quite a liability. From safety features preventing anyone from falling to having people climbing stairs to the deck, your liability insurance will be through the roof. A better question may be to ask how much value a new roof adds. In that case, you still won’t be able to charge more in rent, but a well-maintained building will always cost less to operate and repair.
Engineered Hardwood or Bamboo Floors
For property owners wondering about the best flooring for resale value or how to boost the overall value of the rental unit, engineered hardwood and bamboo are not the best choices. The trouble is that engineered hardwood is subject to more warping and other distortions over time, especially when compared to traditional hardwood, vinyl planks, and laminate. Engineered flooring cannot be sanded and refinished like regular hardwood so that it will have a shorter lifespan, and it’s more expensive than laminate and vinyl.
Bamboo seems like a great option because it is affordable, friendly to the environment, and it is far less likely to see the same type of deterioration found in regular hardwood and other flooring options. What makes it a poor choice for rental units is how easily it can be scratched by furniture, dropped items, and animals. In short, your beautiful bamboo floor will not be so beautiful in a very short amount of time.
For the serious investor wondering if hardwood floors increase the value of a home, the answer here is yes! Real, traditional hardwood is always an excellent option, and budget-minded landlords can stick to vinyl planks and laminate.
Alarm Systems & Smart Thermostats
Alarm systems and smart gadgets are always at the top of the list when it comes to home upgrades worth paying for. Much like a rooftop deck, these items are likely to impress tenants that are considering leasing your property. However, they’re probably not going to increase the amount of rent the property can fetch—even if they help tenants save money on their utility bills.
That doesn’t mean that you should avoid alarms and smart devices in your rental property. There are several benefits that make it worth it for you and your tenants. For example, having a reliable security system in outdoor areas, entryways, and parking lots will improve the safety of your property. Plus, these devices can help cut the cost of insuring your building as well.
There may be some cases where an integrated system is appealing enough to a tenant that they are willing to pay more to lease the unit. This would include built-in security, thermostats, water heaters, lights, and other devices. However, it’s unlikely that these updates alone would drive up the price. Instead, they would be considered features of a high-end or luxury unit.
You might think that new windows would add value to your rental property as they are often a major selling point for homebuyers. The truth, however, is that most renters are not that interested in these types of details in a home, provided the windows look well-maintained and are not leaky and drafty. You’ll be doing your tenants a favor by keeping their utility bills in check, and new windows will certainly improve the long-term outlook for the building structure by preventing air and water penetration into the home.
In some specific cases, upgraded windows can pay off. For example, if the property is located on a noisy, busy street, double-pane windows can help muffle the noise and keep the unit quiet. If the area has a high level of demand and other rental units nearby are not offering these features, you may be able to get a boost in the price for the unit—although it may take some time to see the return on your investment.
New Home Upgrades Worth Paying For
With these upgrades, you never have complete assurance that you’ll get back even a little of what you’ve spent to implement them. If you’re looking for answers on how to increase home value for appraisal or to net higher rent, it’s better to stick to the primary things that renters are looking for. This includes updated kitchens, bathrooms, flooring, and storage space.
If you need help upgrading your property, reach out to the property management experts. At Bay Property Management Group, we have a team that can ensure your property is updated appropriately, so it receives the attention it deserves. Contact us today for more information.