The following is a guest article by Michael Alladawi, CEO & Founder of Revive Real Estate.
Owning a rental property can be a great way to make some extra income while also adding property value through improvements and additions to your home.
Making smart rental property renovation choices can be a great strategy for improving how appealing the property is to rent over the short- and long-term while also giving you the ability to ask for higher rental rates.
However, not all home renovations offer the same type of returns when it comes to their perceived value from rental guests and tenants. Below, we’ll provide some of the most popular rental property renovation strategies you can apply to help increase your income.
Prioritize Your Curb Appeal
The first impression of your property is critical whether advertising to guests online, on travel booking sites, or when potential tenants do a walkthrough. A great way to set the right tone is to invest in improving your curb appeal.
The great thing about improving your curb appeal is that it doesn’t have to break the bank. Budget-friendly improvements like doing some basic landscaping and applying a fresh coat of paint to the building exterior can go a long way in helping to attract more interest.
When you take care of the outside of your property, the chances are that potential short-term rental guests will be more interested since they’ll assume you put the same effort into the interior.
Focus on the Kitchen
The kitchen is a popular room in any home or rental property. Depending on the condition and functionality of your property’s kitchen, it can either improve or hinder your ability to bring in more revenue.
Although a complete kitchen makeover might not fit into your budget, there are a number of different cost-effective upgrades you can make that make a real difference.
You can consider refacing your existing cabinets or countertops with a modern look while upgrading your appliances to more energy-efficient models. Even smaller finishing touches, like a new sink or better lighting, can make a much more impactful first impression of your kitchen area.
Upgrade Your Bathroom
Having a clean and well-designed bathroom is an essential element of every rental property. While the type of renovations you make will be dependent on the amount of space you have to work with, there are a number of income-driving home improvements you can make.
Since bathrooms will be used regularly, you’ll want to ensure the fixtures are high quality and modernized. You can also select more water-efficient models to help decrease utility costs while considering certain aesthetic improvements to help improve the appeal.
Enhance Living Spaces
Creating comfortable and inviting living spaces is another important element for attracting quality guests and tenants. An optimal design layout helps make the property feel more like home and encourages respectful renters.
Replacing worn-out or outdated flooring with more durable and stylish options or upgrading lighting fixtures is a great way to give a living room more character and charm. You can also add decorative touches like artwork, rugs, or modern furniture to help make the space feel more useful and comfortable to be in.
Improve Energy Efficiency
With so many people today being aware of the global impact that large carbon footprints can have on the environment, investing in energy-efficient upgrades for your property can be a great marketing point. Many people today want to live a more eco-friendly lifestyle, and a rental property that supports this need can help them achieve their goals while also lowering utility expenses.
Replacing traditional light bulbs with more energy-efficient LED options or installing smart home technologies is a great start when creating a more eco-friendly rental property. Depending on where you live, installing solar panels on the roof can also be a great long-term investment that significantly reduces your energy spend.
Add Helpful Storage Solutions
Although it may not be the first thing that comes to mind when considering rental property renovation strategies, providing ample storage options can actually be a huge value add. Renters with larger families may need to support multiple individuals, and there should be adequate space they can use to simplify their daily living.
Think about installing built-in shelves in living areas or in bedrooms as well as closets or organizations to maximize the use of space available. Even small additions like built-in storage solutions under the bed may make a big difference to people when making a decision on where to rent.
Avoid Over-Improving Your Space
Even though you may have a number of potential renovation ideas in mind, you’ll want to be careful about not “over-improving” your space.
Spending too much on your renovation may not yield a significant return on investment in the short and long term. Because of the dynamic real estate market and the constantly changing preferences of modern home buyers and renters, you’ll want to make improvements in gradual stages and not take on multiple projects at once.
Research comparable rental properties in your area and see if there is a trend in the type of amenities being offered. Remember, the goal is to make strategic home improvements that help you to increase your rental income while still being competitive, not pricing yourself out of the market completely.
Think About Your Future Resale Value
While the primary focus of renovations may be to increase rental income, it’s also important to consider the potential impact on the property’s future resale value. Strategic upgrades can make a property more attractive to buyers when it’s time to sell and potentially lead to a higher sale price and a faster sale.
Focus on renovations that offer a good return on investment and appeal to a broad range of buyers. Consider conservative design choices and durable materials that will stand the test of time.
Get More Value Out of Your Rental Property
A rental property can be a valuable investment that pays dividends long-term. However, making wise investments in home renovation upgrades is critical to generating the most value and income from your property.
By following the strategies discussed and focusing on high-return renovation projects, you can add long-term value to your short-term rental property.
Revive Real Estate partners with real estate professionals to provide the funding, guidance, and contractors needed to get strategic pre-sale renovations done fast and for maximum value. Revive homes sell for more and maximize the sellers’ returns.
