Should You Repair or Replace? Choosing Wise Renovations for Rental Propeties
Rental property renovations open the doors for financial rewards through potential rental or selling price increases. However, deciding which renovations to undertake that will ultimately reap the most benefits can be complex. Interestingly, there’s a lot of advice offered by real estate professionals about which renovations are most worthwhile for investors, and these experts know what improvements renters really want.
Even more interesting – they know how to get the most bang for your buck when it comes to making wise property renovations, understanding the correlation between curb appeal and rental rates, how to choose remodeling projects that preserve equity and the integrity of the property.
Still Turning and Burning your Property? Don’t Get Burned Yourself
More property investors are realizing the benefits of treating their rental homes more like “their home” as opposed to another “unit.” Even scaled down renovations and remodeling projects can help increase equity and help you maintain a top-notch resident base. Investing in major projects is just that – major – so keep in mind that even minor improvements can make a tremendous long-term difference for both renters and owners.
However, some major projects cannot be ignored, and this is when treating it as a home comes into play for investors. One major roofing failure can spell disaster, put residents out of their home, and you temporarily out of income – facing a huge repair bill. Itemize your “to do” list according to importance, putting preserving the integrity of your dwelling on top of the list. Everything else you should evaluate by cost, the improvement’s potential lifespan, and consider any applicable tax credits and return on investment.
Cleaning, Cleaning, Cleaning – The #1 Return on Investment for Rental Properties
That’s right – a clean home is a desirable home. Those appliances don’t have to be top condition or modern, just clean! Carpets and flooring don’t need to be replaced when a good shampooing or deep cleaning may make them look brand new again.
Consider that the lifespan of carpeting averages about 11 years, according Old House Web’s experts, but wood flooring and many types of tile can last a lifetime. If replacement is imminent, consider upgrading to resilient and lovely Terrazzo tile or a natural, eco-friendly wood. If there are only a few flaws, chips, scratches, or imperfections that can be resolved with spot replacements or partial refinishing, then the cost-effective solution is clear!
Interior and Exterior Painting
Curb appeal extends to the interiors in the eyes of a renter; after all, they have to see those walls every day. If you’ve rented to a smoker or the same resident for many years, you’re likely justified in going with a complete overhaul with interior paint. However, you might be able to get away with a few walls here and again, but it’s such an inexpensive renovation, it’s best to refresh everything for your new charge.
Kitchens and Bathrooms – To Renovate or Resurface?
These two improvements are known for their tremendous return on investment; however, they are also known for their high initial investment. Contractor and remodeling experts are promoting the benefits of resurfacing over replacements. Resurfacing bathtubs, showers, and cabinetry are far more cost efficient projects than replacing them, particularly if they are in decent condition. The pros at Old House Web estimate that acrylic baths have a 15-year lifespan, so estimate “how much life” your major fixtures and appliances have left before considering costly replacements.
Final Considerations in Remodeling Rental Properties
Your budget, how much time you have, and the condition of your property certainly play a role in your remodeling decisions; however, as a wise investor you have to know when to “turn and burn” and when to take your time and renovate units as though you were living there. You’ll see happier residents and may even get some recommendations through your efforts of being a responsible and caring landlord.
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AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.
Tags: Apartment Leasing, AppFolio, Property Maintenance, Property Management