6 Home Improvements That Add Value to a Rental Property
It's official, the real estate boom is not about to cool off. According to a survey report by Bank of America, despite the recent rate hikes, home prices are still expected to finish the year up 10%. Although it is not the highest hike in recent history, it still makes the sector attractive for investors. Of course, this also means that as prices go up, many people cannot afford to buy what they want. Instead, they opt to rent and wait for the market to cool off.
If you have rental property, you can pull off a few strategic home improvements to boost the value of your home and make it more attractive to renters. Read on and learn which improvements to make. But first, a few tips to guide your decisions.
Tips for Sellers and Landlords - Don’t Work Alone
Home improvements are not cheap, and there is always a temptation to DIY. But, this is not advisable. Reach out to reliable builders and tradespeople for advice on the repairs and improvements. Building experts will give you better estimates of project costs and timelines. They also do a better job technically, and are faster. Other professionals like tax lawyers and legal experts will advise you about legal issues like local authority permits and the Tax and Jobs Act passed in 2017. It stipulates that only upgrades that add value to the structure, extend its life expectancy, or adapt it to new use, qualify for tax benefits.
Once you have locked in a contractor, scheduled the job, and settled the legalities, start thinking about who would be your ideal tenant. If it’s your first time, or you do not have much experience, avoid depending on your gut. There are ways to narrow down on excellent and cooperative tenants.
Consider using a tenant screening report to vet the prospects.
The following home improvements will add value to your rental property.
Enhance Curb Appeal
Improving the curb does one thing - it makes the property look awesome! Whereas it might not add significant monetary value to the home, a well-manicured lawn, low-budget landscaping, and a fresh coat of paint (both inside and outside) will make heads turn. An attractive curb will bring in the prospects. You can also consider utility upgrades like improved lighting and installing entrances that are friendly to disabled individuals. But be careful not to overdo it. Ensure you lean towards cost-effective options.
Additional Dwelling Units or ADUs
The pandemic caused people to reconsider how they work. Working from home is growing more popular, and companies are also shifting policy and infrastructure to support this tide.
Your rental will become incredibly useful if you can provide spaces for people to work at home, but at the same time away from the rest of the family.
You can consider building small self-contained spaces within the property or converting underutilized spaces like garages and basements into ADUs. Whatever you decide, ADUs will add significant value to your rental property.
Upgrade the Kitchen and Bathroom
Traditionally, kitchens and bathrooms have been the most critical rooms in the home. Improving both often adds significant value to a property and makes it more attractive to renters. But you don’t have to do upgrades that drain your wallet. Consider upgrades that increase utility. For example, the main focus for the kitchen should be plenty of storage, lighting, and sufficient working space and surfaces. Consider adding granite countertops, high-quality cabinets, and stainless steel appliances. Ensure all the bathroom plumbing works properly, consider replacing plumbing fixtures, do some vanity and flooring upgrades and ensure it is well lit.
Home improvements that will help reduce energy usage and improve utility will be a win-win for you and the renter.
Rethink the Windows
If your rental property is an old building, consider replacing the windows. Modern, dual-pane windows can significantly reduce the heating and cooling bills and make the home look more attractive. However, be careful about replacing windows if you have an old building where there is more value in aesthetics. Working with an experienced realtor and windows pro can help you decide.
Replacing windows with better, energy-efficient models boosts the value , improves the look and feel, and significantly reduces running costs for renters.
Outdoor and Wellness Spaces
Speaking of windows, think about adding outdoors and wellness spaces. Most renters live in urban centers and other high-density locations. Their homes have limited spaces and many lack private backyards. Since the pandemic created a distrust of public outdoor spaces, you can create wellness and an outdoor feel in your rental.
Reach out to a remodeling expert and consider converting one room into a well-equipped gym, building a new patio, or re-doing the terrace with bistro furniture. The improvements will boost the value and provide critical spaces for renters within the home.
Include Some Smart Upgrades
Technology is now an integral part of homes. Homeowners and renters increasingly demand security cameras, smart locks, and other technologies to improve safety and utility. Consider cost-effective technology installations like the following:
- Smart locks.
- Video doorbells
- Smart cameras and home security systems.
- Smart thermostats
- Smart lights
- Smart smoke detectors
These simple gadgets can give your rental property improved convenience and functionality. They will increase the value of your home.
A Final Word
Whereas you want your rental property to stand out, avoid making unwarranted upgrades that exceed other properties in the neighborhood. You might end up not recouping your investment. Some of the improvements mentioned above are low-cost but could boost the value. Other improvements could be costly and require meticulous planning and advice. Overall, these improvements will significantly enhance the value of your home and make it more attractive to renters.
