Best Ways to Add Value to a Rental Property
As a real estate investor or landlord, you’re not just looking to break even – you’re in it to score a profit. One effective way to achieve this is by increasing the value of your rental property. Taking on anything from light cosmetic projects to heavy rehabilitation can put more money in your pocket and give you a higher return on investment.
The best part? You don’t need to break the bank for a property makeover. We highlighted six budget-friendly methods to give your rental property the TLC it needs, boosting its value and potential rental income. Whether it’s about thoughtful tweaks or extensive renovations, it’s not just about wooing more tenants, it’s also about justifying a higher rental rate.
It’s important to note that regular maintenance is non-negotiable. Whether it’s routine check-ups, HVAC upkeep, addressing plumbing and electrical issues, or enforcing pest control, proactive maintenance is the key. By keeping a step ahead of these concerns, you’re not just dodging potential issues down the line, you’re also ensuring your property stays in prime condition for prospective tenants.
Smart Home Technology
In our increasingly tech-savvy world, infusing your rental property with a touch of digital sophistication can “wow” your prospective tenants, while also paying off in the long term. A more comfortable and energy-friendly space can pave the way for financial success.
It’s a bonus when tenants realize they could save money on utility bills, allowing their budget to stretch further. Going green and endorsing energy-efficient appliances demonstrates a landlord’s thoroughness and consideration while slashing costs for the tenant. Incorporating the following devices will enhance the security of your rental property and benefit all parties involved.
- Smart smoke alarms equipped with carbon monoxide detectors can promptly detect hazardous levels, allowing you to evacuate residents and ensure their safety.
- Smart plugs can control, schedule, and automate nearly any electronic device in the property and are small and discreet. If you forget to turn off an electric kettle, radio, TV, etc., a smart plug will turn it off for you when you leave home.
- Doorbells featuring video and/or motion sensor cameras provide real-time notifications of any unauthorized access, particularly when the property is unoccupied. That way if there is any suspicious activity you can respond accordingly.
Smart home devices won’t only add value to your rental property, but they’ll boost the appeal to your potential tenants. Investing in smart devices that contribute to risk prevention not only instills a greater sense of safety for your residents but also reduces your liability for potential incidents.
The exterior is the first impression a potential tenant will have of your property. A well-maintained yard or a clean driveway can make a big difference in attracting people to consider your property as their next home.
A manicured yard, vibrant flowers, and a clean exterior can work wonders in capturing the attention of prospective tenants. Don’t underestimate the power of curb appeal—it can hold as much significance as the location of the property itself.
Enhancing exterior appeal doesn’t require thousands of dollars. Simple and inexpensive fixes, such as trimming shrubs and bushes, maintaining a healthy lawn, or planting a tree, can make a remarkable difference.
Remember, investing in your property’s exterior is an essential part of leaving a lasting impression on potential buyers or tenants. From shaping a captivating front garden to laying down a fresh bed of mulch, simple updates can add significant value to your rental property. Having a frontage that outshines similar properties in this competitive market can lead to a high return on investment.
It’s no secret that kitchens can be deal-sealers when it comes to renting or selling houses. So, a few smart touch-ups in this space can add a lot of value when it comes to your rental property.
Replacing or refinishing countertops instantly elevates the kitchen space, as the tabletop is usually the focal point of the space. The most popular materials are granite and quartz and are a worthwhile investment for a long-lasting addition to your rental property. Aesthetically pleasing spaces in a home will bring a new appreciation from potential renters.
If you’re remodeling on a budget, stainless steel and concrete are more pocket-friendly and are still popular materials to achieve that modern kitchen vibe. Kitchen sinks are also an attractive feature to potential renters and go hand-in-hand with countertops. 2023 design trends favor undermount sinks for a sleeker, more modern feel and rejects more outdated styles from previous decades.
There are little things you can do that aren’t as costly in the kitchen that make a big difference. Try sprucing up the grout around your sink, add fresh sealant to your countertops to give them a bright, new feel, or switch out those cabinet handles for a quick refresh. A well-maintained kitchen can add a lot of value to your rental property and it’s an easy way to reel in more cash over time.
A fresh coat of paint on the exterior boosts the value of a house by an average of $7,571 as of February 2023. Exterior paint contributes to the curb appeal, which adds to the first impression of potential renters. It can set the tone for what the renter should expect regarding the condition of the rest of the property.
Here are some indicators that your exterior walls need a new paint job:
- Existing paint is flaking and peeling
- Exterior paint is faded
- Property has cracks, gaps, or wood rot
- Water damage
Refreshing the interior paint of the property is as equally important to add value to your rental home as the exterior. Choosing the right color and shade in each room will make or break some potential prospects decision to rent. Repainting the inside of a home increases the value by 5% as of February 2023. It’s important to assess your property and determine whether its current paint is already in good condition, or if you’ll be able to boost the market value with a little elbow grease.
Here are some signs your interior walls need repainting:
- Interior is peeling and chipping
- Color palette is not appealing to buyers
- Paint is faded and discolored
By giving your home’s interior and exterior a fresh coat of paint, you can anticipate a substantial return on investment with an average increase of $4,000 in your home’s value. This translates to an impressive 107% ROI for interior painting and a respectable 55% ROI for exterior painting as of 2022.
Flooring can entirely change the look, feel, and functionality of a rental property. Regularly upgrading your flooring can easily increase your rental income. Unless your property is rocking concrete, hardwood, or stone floors that are known to age well, your flooring shouldn’t be showing off more than a decade’s worth of wear and tear. Do a little research into the lifespan of your current flooring or the one you have in mind. This will help you decide whether it’s time for a floor facelift.
The quality of flooring in your property is attractive to the potential renter and a big part of whether they see themselves living in your property. Remember, they’re looking for a home that mirrors their lifestyle, and a beautiful floor can be the icing on the cake.
Factors such as functionality, safety, and comfort are necessary to increase the desirability of your rental property. If you hear creaks in the floor that is an indication that the subfloor needs to be replaced. As a landlord you should take precaution to avoid liability for any harm caused to tenants. Cracks, creaks, and leaks could be breeding grounds for hazards.
High-value renovations to consider for a bathroom remodel can vary in labor. Updating the vanity, shower or toilets can easily elevate the design of the bathroom. But as a landlord, you can also flex your creative muscles for long-term profit. How about upcycling that old mirror or turning an unused dresser into a unique storage solution? These DIY projects can give your property a unique edge that renters will love.
The main mirror in a bathroom dictates the perception of space and contributes to the overall ambiance of the design and style. Whether it’s modern chic, luxury, or a vintage look, the mirror plays a key role. Plus, it’s like an optical illusion, making the space seem bigger, which is a definite win for potential tenants.
Simple updates such as changing the toilet seat, or even the entire toilet if required, fitting a new shower head, and modernizing the faucet and cabinet hardware can make a significant difference.
Lighting can also alter the quality of design in the bathroom. Want to create a cozy atmosphere? Pick warm, ambient lights. For a brighter, more vibrant look, LED lightbulbs are your best friend. Just keep in mind the color quality when you’re lighting shopping—it can dramatically affect the overall vibe of the bathroom.
When it comes to bathroom remodels, it’s all about finding the sweet spot between looks and functionality. If you get that balance right, your bathroom will not just look good, but it’ll also cater to the needs of your potential renters, adding great value to your property.
To Wrap Up –
Sprucing up your rental property can be your golden ticket to ramping up its value. Yes, it requires some elbow grease and time, but it’s like tending a garden—you put in the effort now and reap the benefits later.
Keep in mind, renters don’t mind shelling out a little extra for a place that’s well cared for and offers modern amenities. They’re not just looking for a roof over their heads—they’re after a lifestyle.
If you’re thinking, “Sounds good, but where do I get the funds?” Check out Asset Based Lending’s loan programs. We could be just what you need to start transforming your property into a high-value rental.