Best Rental Property Improvements for Increased ROI
Not all property improvements are equal when it comes to increasing your ROI. In some cases, what you think will make your property command a higher yield provides extremely poor results. Yet other, simpler, upgrades can have a startlingly positive effect.
In addition to what work you might carry out, it’s also important to consider what not to do. Remember, your rental property is all about profit, not your personal taste.
The Do’s and Don’ts of Rental Property Improvements
- Do carry out these rental property improvements to increase ROI
- And leave these well alone…
Do carry out these rental property improvements to increase ROI
The following six upgrades are proven to increase the desirability factor (and, therefore, the amount you can charge for rent) of a property.
- Improve the curb appeal: This is real estate spiel for how good your property looks from the outside. Consider landscaping the gardens/yard, painting the property, its windows, and any outbuildings, laying a lawn (or re-turf an existing, tired one), digging flower beds, adding or improving the outdoor lighting, and investing in patio furniture that signals what a wonderful lifestyle potential renters will have if they move in.
- Upgrade the flooring: Either by replacing worn carpets or switching up to wood, laminate, or tiles. Today’s advanced lino options lift even the drabbest of floor areas. Make no mistake, flooring is often one of the biggest letdowns in a property, which is a shame because it’s such an easy fix.
- Make the home energy efficient: In addition to good insulation, consider adding environmentally friendly options. This could include solar panels, heat pumps, low-flow bathroom and kitchen fixtures, and more. You could also consider changing doors and/or windows to ensure better climate control.
- Repair or replace a tired roof: This is a stand-out way of improving the desirability of a property. While it can mean a bit of an initial outlay (the average cost of reroofing is around $8,000), it makes a property much more attractive to potential renters and also reduces the risk of leaks or other expensive problems over the long term.
- Improve the yard area: Adding a deck or patio is an effective manner of increasing ROI. You can simply add the flooring or, if you live in a sunny climate, consider adding a shelter that will shade your tenants from UV rays when they sit and/or entertain outside.
- Increase the living space: Can you renovate the attic or basement? What about converting the garage into an office or extra bedroom? How about adding a garden room? Rental prices increase in line with the square footage, so this is usually money well-spent.
And leave these well alone…
In general, anything that’s extremely personalized probably won’t bring you a significant ROI. Examples include:
- Closet renovations: Unless we’re talking a simple Ikea hack, it’s simply not worth spending thousands of dollars on the internal spec of a closet.
- Huge kitchen renovations: If you want to upgrade the kitchen, keep it simple. Change any obviously damaged units, sure, but you can ensure your kitchen has the wow factor with simple touches, such as changing the hinges and door handles. This, along with a new coat of paint, can completely reinvigorate a kitchen area.
- Putting in a fancy bathroom: All that’s realistically needed in a rental property is clean, simple lines. Leave the fanciness for the property where you live, not rent out.
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