One key ingredient to maximizing the returns from a rental property is increasing its value through well thought out renovations and upgrades. This is a skill that landlords need to cultivate to retain the right tenants successfully.
Adding value to rental properties goes beyond securing tenants, especially in hot rental property markets. Such markets present a window of opportunity for landlords to maximize their profits. Rental property owners can leverage this opportunity by increasing the value of their rental properties. Landlords in the Denver metropolitan area can take advantage of such opportunities with a range of minor to major renovations.
The approach used to renovate a rental property should ideally be different from how a homeowner would renovate their own home because the motivation is different. It is expected that a homeowner would put in more time, emotion, money, and effort into their home upgrade because it is their permanent place of residence.
Level of investment
The level of investment a landlord puts into rental property should be enough to attract and keep good quality tenants. This means targeting key renovation and upgrade essentials that hit the sweet spot of any potential homemaker and tenant without breaking the bank to ensure a good return on investment. Some of the main qualities future tenants look for in a rental property are its appeal, comfort, and functionality.
We can get guidance on essential renovations that can increase the rental properties’ appeal from experts working in this field. These strategic pointers can help landlords raise the value of their properties, cascading into them, attracting and retaining the right tenants and the best rental offers. Laura Agadoni, landlord, author, and editor-in-chief of the Landlordology, emphasizes how critical it is to attract renters as failure to do so would means a vacant property, which she describes as the ultimate enemy to a landlord.
Secure your investment return
Dave Spooner, the co-founder of the tenant management software, Innago, highlights how investing in meeting and exceeding the tenants’ expectations can secure a good investment return. Investing in a home’s vision, a tenant expects increases the facilities’ attractiveness, reducing the chances of the rental properties being unoccupied for a prolonged amount of time.
There is a range of property improvements that landlords in the Denver metropolitan area can undertake. Building upgrades and renovations can be minor such as upgrading the hardware, which can go a long way to making a property look more modern. Other installations can be major and may involve tearing down a part of the housing infrastructure like flooring or walls.
The choice of renovations should not be random if the landlord wants to maximize their rental property’s value addition. Considerations on which renovations to prioritize should be a convergence of what ranks highest on a potential renter’s checklist when it comes to a place they could consider calling home. At the top of the list are the appearance, ambiance, and utility of two main areas, the kitchen, and the bathroom.
Although there are other considerations for increasing the appeal of rental properties, these two areas rank highest. Of course, other additional renovations also rank high on tenants’ expectations, and these are covered to maximize the appeal of any rental property.
The Kitchen Remodel
It has been said that the kitchen is the heart of the home and rental property experts Innago and Agadoni agree that the kitchen is one of the first port of calls when looking to renovate a rental property to raise its appeal.
Agadoni found that replacing discordant, poorly matched, and outdated kitchen appliances offered a high return on investment. Coordinated appliances such as the oven, dishwasher, microwave, and refrigerator immediately gave the kitchen a trendy, chic, and consistent look.
Additional renovations to enhance the kitchen aesthetics include:
- Opting to revamp the kitchen cabinets to add a new lease of life to the kitchen. All that’s needed is sandpapering, a fresh coat of paint, and new hardware for a more up-to-date look. This may be the most optimal value addition compared to the more expensive alternative of totally replacing the cabinets.
- Another good but more expensive investment in a kitchen is the installation of new granite countertops. This renovation pulls the whole kitchen together and increases its appeal. Of course, there are more inexpensive options like choosing a less expensive countertop material that is strong and resistant to the daily wear and tear associated with a kitchen.
- Additional finishes for more modern touches could include a change of fittings such as faucets and easy to clean glass backsplashes. Backsplashes serve a double purpose because they do not require a lot of upkeep. Low maintenance installations appeal to any tenant because of their convenience. Glass backsplashes also reduce the amount of cleaning a landlord needs to do pending a new tenant.
- There may, however, be instances when the rental property owner may need to rip everything out and redo the whole kitchen. There are still ways to maximize the return on investment. Carrying out a DIY demolition is one way to reduce costs.
The Bathroom Renovation
The outlook of the bathroom is another major deciding factor for renters looking for a new living space. A modern, well designed, and neat bathroom is definitely a priority for increasing the rental property value and appeal. Minor changes may include adding a new shower head, new faucets, decorative pieces like an elegant mirror, a unique upcycled furniture piece, or door and cabinet hardware.
Making the bathroom unique can make a property unforgettable to prospective tenants. Landlords can be creative with even smaller bathroom spaces by adding extra storage and rearranging components. Doing this adds value to the property by increasing the bathroom’s functionality, with the renters getting the most out of the space.
For unique, more up-to-date, and elegant designs that can enhance the bathroom’s appeal, landlords may consider replacing the bathtub with a walk-in shower or putting in shelves for extra storage space, and adding a barn or pocket door. These changes may require a more intermediate investment. Another major selling point, especially for housemates sharing a rental property, is a one-to-one bedroom-to-bathroom ratio. If it is within the budget, installing additional bathroom units could attract tenants and keep a new niche.
Sometimes minor to moderate changes are just not enough to get the bathroom up to speed, and a complete bathroom overhaul is needed. In such a case, there is still a way to minimize costs by doing DIY bathroom demolition. Denver metro rental property owners do not have to look far as we have some pointers remodeling a bathroom on a budget.
Another important area that can increase the appeal of a rental property is its exterior, which gives the initial impression and greatly influences the potential tenant’s final decision. Property owners need to pay attention to creating an inviting exterior while keeping the cost and maintenance level low.
Painting the exterior, the outside walls, and doors, and sealing or repaving the driveways and pavers are all touch-ups that can give a positive first impression to any prospective tenants.
Basic landscaping is something property owners can do themselves. Adding potted plants, a small garden, adding planters to the front of an apartment building, pruning trees and shrubs, and planting or tending to the lawn can beautify any front yard.
Opting for an Open Floor Plan
A property’s look can be modernized by bringing down some of the building walls to create an open floor plan. Although this is not a low-cost investment, it can significantly increase the property’s appeal and value because of its popularity. Open floor plans are trendy and have a range of functionalities, such as flexibly usable space and increased natural lighting, which can be enhanced by adding more windows.
One word of caution for tenants intending to create the open floor plan as a DIY:
There is a need to be clear regarding what wall needs to be brought down, as a load-bearing wall supports the building’s weight and would require an expert hand. Doing such a project as a DIY would help bring the cost down.
We recently carried out a survey that showed a quarter of tenants opt for their floors to be redone. This highlights the importance of new flooring for tenants. Laura Agadoni has an expert tip for landlords who want to redo the floors of their rental property. Push this project right to the very end of the list as other refurbishment and upgrades can create a lot of dust, potential floor damage, and spillages, which would mean additional floor cleaning. In contrast, she recommends putting new floors just before installing appliances, which should be done at the end.
Ensuring rental properties have all the must-have amenities that renters consider essential to modern life can set any landlord apart and are likely to attract the best rentals. Some important must-haves that add convenience and comfort to a rental property include a washer and dryer in-unit, air conditioning, storage space, a dishwasher, outdoor living space, and a fenced-in yard for pets.
Minor Fixes and Painting
Before deciding what needs to be replaced around a property, landlords can carry out some repair and maintenance work, reducing unnecessary costs. There are some simple and minor upgrades and touch-ups that can make any rental property attractive and inviting. Adding modern hardware such as racks, blinds, trendy door handles, and locksets can give a property a fresh outlook.
Landlords can even go the extra mile from just repainting the interiors to allowing tenants to choose the paint color for all or specific spaces in the building. The color choice of an accent wall is unique to an individual’s taste. Giving prospective renters some autonomy over their soon to be rental home is likely to pull in the best tenants.