Key takeaways
- Upgrades to rental properties can justify higher rents, attract quality tenants, reduce maintenance requests, and differentiate properties in competitive markets.
- Effective curb appeal enhancements include fresh paint, landscaping, and lighting, while interiors benefit from modern appliances and kitchen upgrades.
- Flooring options like hardwood or quality tiles in neutral palettes appeal to a broad audience; replacing outdated fixtures can instantly modernize spaces.
- Investments in property upgrades, while initially costly, yield higher rents and lower vacancies, ensuring long-term returns.
This blog was recently updated on Sept 15, 2023
Investing in rental properties can be a lucrative investment. The IRS estimates that about 10.6 million Americans make money from rental properties. However, it’s not as easy as it seems.. A lot of factors affect the profitability of a rental property, including location, management, and quality of the home. Hence, upgrading your property can be the first step to maximizing your rental income.
How property upgrades maximize your rental income
The value proposition of any rental property hinges on its allure, functionality, and overall renter experience. Upgrades are not just about aesthetics; they influence a renter’s perception of value, which in turn can justify a higher rental price. Here’s how:
- Higher Perceived Value: Just as with products in a store, presentation matters. A well-maintained and upgraded property can command a higher rent simply because it looks and feels worth more. The more appealing a property is, the more renters are willing to pay for it.
- Increased Tenant Retention: Quality upgrades can also lead to longer tenant stays. The less a tenant feels the need to request repairs or upgrades, the more likely they are to renew their lease, leading to reduced turnover costs for landlords.
- Attraction of Higher-Quality Tenants: A beautifully upgraded property often attracts tenants who are willing and able to pay a premium for quality. Such tenants often take better care of the property, understanding its value.
- Fewer Maintenance Requests: Modern appliances and fixtures are less likely to malfunction or break down than older, outdated ones. This means fewer maintenance requests, leading to savings in the long run.
- Differentiation in a Competitive Market: With numerous rental properties available, those with significant upgrades stand out from the crowd. This can lead to faster rentals, minimizing the duration the property remains vacant.
Recommended: Rental property ROI: What homeowners need to know
5 property upgrades to maximize your rental income
1. Enhance the curb appeal
Improving the curb appeal is one of the best and most effective ways to increase the value of your property for a simple reason—it’s the first thing someone ever sees when they approach your home.
However, many investors neglect to improve the curb, focusing on interior upgrades, potentially leaving money on the table. The good news is boosting your curb appeal doesn’t have to be expensive.
Simple steps can make a significant difference:
- Give your front door a fresh coat of paint.
- Light up your pathways with solar-powered lights.
- Add potted plants for a splash of green and color.
- Plant trees for a touch of nature.
- Mend any damaged sections of your fence.
- Power wash or thoroughly clean your driveway.
- Invest in basic landscaping for a polished look.
If your budget permits, consider adding a prefab trellis or even a few pieces of furniture to your front porch. Every little change can make your home more inviting and valuable.
2. Upgrade the appliances
Once inside, one of the first things potential renters notice is the state of the appliances. Their condition can be just as impactful as the home’s location in their decision-making process.
Old, inconsistent, or poorly functioning appliances not only detract from the perceived value of your property but can also become a maintenance headache. Constantly attending to repairs or makeshift solutions can lead to escalating costs over time.
Investing in high-quality, matching appliances, complete with warranties, can be a game-changer. Not only will this elevate the aesthetic and functionality of your property, but it also offers peace of mind for both you and the renter.
Consider this: if your home comes with washer/dryer hookups, adding a reliable set can further amplify the value and appeal of your rental property. Opt for modern, energy-efficient options where possible; they’re an attractive feature for many renters today.
3. Improve the kitchen aesthetics
The kitchen is another place where you can significantly add to the value of your home. There are several ways to upgrade your kitchen:
- Replace the plastic laminate countertops with better-quality granite, slate, or quartz countertops.
- Replace the worn down and outdated cabinetry.
- Consider adding a breakfast bar or a kitchen island
- Add wall tiles that match the granite countertops (glossy white and brick-style are popular choices).
If these upgrades seem too expensive, don’t worry! There are also simple upgrades that can make your kitchen more appealing, such as:
- Adding a portrait or a painting.
- Repainting the kitchen cabinets with a color that matches the entire home.
- Changing the cabinet handles
- Adding plants.
- Adding shelves or other methods of organization like peg boards, mason jars, hooks, and pot racks.
4. Update the flooring
Although flooring upgrades may not always be necessary, outdated, damaged, and worn-out flooring definitely needs to be upgraded.
There are several options to choose from:
- Hardwood: Hardwood floors are timeless and favored by many renters for their elegance and ease of cleaning. While genuine hardwood can be on the pricier side, laminate or engineered wood options offer a similar aesthetic at a fraction of the cost.
- Carpet: If you choose to keep carpeting in certain areas, ensure it’s high-quality, stain-resistant, and in a neutral color that appeals to a broad audience. Consider offering professional carpet cleaning between renters as an added bonus.
- Tiles: In areas like the kitchen and bathroom, good-quality tiles can be both practical and attractive. Porcelain and ceramic tiles are durable options, with luxury vinyl tiles (LVT) becoming increasingly popular due to their water resistance and versatility in design.
When embarking on a flooring revamp, neutral palettes are your best ally – they remain in vogue and are versatile enough to endure changing décor trends. To optimize your budget, prioritize upgrades in areas that truly demand a refresh, leaving well-maintained sections untouched.
5. Replace the fixtures
Fixtures play an understated, yet pivotal role in enhancing the overall look and feel of your rental property. Swapping outdated fixtures for more modern and appealing ones can instantly uplift the ambiance of the entire space. Here’s what you should consider:
- Light fixtures: Lighting sets the mood for any space. Whether it’s the kitchen, living room, or bathroom, the right light fixture can make the room feel more open and inviting. Consider upgrading to energy-efficient LED fixtures that are not only cost-effective but are also eco-friendly. Pendant lights over kitchen islands, chandeliers in dining areas, and wall sconces in hallways can add charm and elegance.
- Faucets and showerheads: Upgrading bathroom and kitchen faucets to modern, high-efficiency designs not only adds aesthetic value but also promotes water conservation. A rain showerhead or a hand-held one in the bathroom can give it a luxurious feel, making it more appealing to potential renters.
- Door knobs and handles: It’s surprising how much of a difference changing door knobs and handles can make. Consider brushed nickel, matte black, or gold finishes to bring a contemporary touch. Ensure that the design is consistent throughout the home for a cohesive look.
- Cabinet pulls: In the kitchen and bathroom, swapping out old cabinet pulls and knobs can immediately make cabinets look fresher. Choose designs that complement the overall theme of the space.
- Electrical outlets and switches: Modernize old outlets with ones that come with USB ports, making them convenient for renters. Replacing old, faded switch plates with sleeker designs can make a world of difference.
Up next: Managing your first rental property: A guide for first-time investors
Final thoughts
Maximizing rental income is more than just about having a property in a good location. It’s about making smart, strategic upgrades that elevate the appeal and functionality of the space, making it irresistible to potential renters. While some of these upgrades might require an initial investment, the increased rent and lower vacancy rates will ensure a healthy return in the long run. Remember, in the rental business, it’s the finer details that can set your property apart and keep it in high demand.
Recent Comments