Buying a rental property is great. But it’s what you do after you purchase it that can make the biggest difference and put you on a path toward a good return on investment.
You need to be strategic about making smart upgrades that enhance its worth, appeal, and profitability. Renters today don’t simply want functional spaces. They also want spaces that work well, are comfortable, and are modern.
As a rental property owner, you can use upgrades to attract higher-quality tenants, keep them around longer, and even justify asking for higher rent.
The good news is that not all renovations will cost an arm and a leg. Below are five updates that are definitely worth considering for your rental property.
1. Update the Kitchen
For most renters, the kitchen is the heart of a house. A cramped, old, or crumbling kitchen will scare people away, but a clean, modern kitchen will brighten up the unit.
You don’t have to pursue a complete overhaul. Instead, tackle budget-friendly projects that offer good bang for your buck:
- Replace your countertops with durable and stylish surfaces like quartz or butcher block.
- Change hardware on kitchen cabinets.
- Install a new, fashionable backsplash that adds character and style.
- Upgrade old appliances with new energy-efficient ones.
Pursuing these or other simple kitchen upgrades can move the needle by making your rental property more attractive to tenants. You can speak to a property management firm if you want more recommendations on how to improve the kitchen space.
2. Renovate the Bathroom
Bathrooms are relatively small spaces but have a huge impact on tenant satisfaction. Dated fixtures, scratched tile, and poor lighting can lower the appeal of a rental unit.
The good news is that bathroom renovations can be inexpensive. Some options include the following:
- Install new versions of outdated faucets, showerheads, and lighting to help save water.
- Re-grout and re-caulk showers and tubs so they look like new.
- Swap out an old vanity with a new one.
- Install functional elements like shelves, towel rods, or a medicine cabinet with a mirror.
Clean, functional bathrooms are highly desirable for renters. It’s worth considering upgrades.
3. Upgrade the Flooring
Changing the flooring can be a great investment. If the carpeting is worn and torn, no amount of cleaning will resurrect its former aesthetic appeal. Carpet is cheap, but it gets stained, it becomes worn, and it needs to be replaced often.
Hardwood is more appealing, but it’s expensive and harder to install. You may want to consider laminate flooring, which is easy to install and relatively cost-effective. Heading down to your local big-box store to check out flooring options is a good idea.
4. Boost Energy Efficiency
Tenants are more interested these days in being better stewards of the environment. You can make your rental units more attractive to them by focusing on energy efficiency.
Some of the affordable upgrades to include are as follows:
- Replace windows with new, energy-efficient models that keep the cold air out.
- Insulate to heat and cool more effectively.
- Upgrade to programmable thermostats that help tenants conserve energy.
- Install new ENERGY STAR-rated windows to replace old ones.
These improvements will save your tenants money, and your building will be more attractive than similar buildings that are less energy efficient.
5. Improve Curb Appeal and Exterior Space
First impressions count—especially in the case of rented homes. Achieving great curb appeal does not have to mean spending a ton for massive landscaping projects or expensive additions.
Some smaller projects that can make a big difference include the following:
- New exterior paint or a siding makeover.
- New or renovated front entrance with a welcoming front door.
- Install low-maintenance groundcover plants such as perennials, shrubs, or mulch.
- Repair exterior lighting for safety and appearance.
Tenants would rather live in houses that have available outdoor living space, especially in high-competition rental areas. So, curb appeal matters.
The secret to enhancing your rental property is to find the balance among cost, durability, and renter appeal. The cheapest thing to do is simply to go out and purchase high-end finishes, but the most valuable improvements are those that build long-term value, reduce the need for maintenance, and enhance the property’s appeal.