We love talking about rental property renovations.
If you’re a property owner who hesitates before investing in expensive renovations and improvements, we understand. It’s expensive. Time-consuming. These updates are best made when your property is vacant, and you already don’t have money coming in…so why add to the expenses?
The right renovations do not have to throw you over budget.
They don’t even have to be renovated. Basic aesthetic upgrades and updates can have a huge impact on maximizing the value of your property and increasing ROI.
We’ve also seen a huge shift in tenant demand. While those hard surface floors are great and the new paint makes things look and smell brand-new, what tenants are really looking for is convenience. They want to see renovations that make their lives easier and their rental process simple. Think digital keypads and video doorbells.
Let’s take a look at the rental property renovations that will make the biggest difference in what you earn.
Good Reasons to Renovate
Renovations do two critical things for your rental property:
1. Attract High-Quality Tenants
This is a competitive and highly priced rental market. How can you make sure that your property gets the attention it deserves while tenants are scrolling through one listing after another? A well-maintained and modern property appeals to tenants who are willing to pay premium rent and are more likely to care for the space. You want to attract the best tenants, and the only way to do that is by providing a home that they’ll actually want to rent.
2. Boost Property Value
Strategic upgrades not only enhance aesthetic appeal but also contribute to long-term appreciation, supporting resale value. It’s hard to sell a home for top dollar when there’s circa-1970s wallpaper in the bathrooms and wood paneling on the walls in the living room. No one wants to pay a lot of money for shag carpet or old appliances. Upgrades and updates boost your property value and your rental value, too.
Deciding Where to Start: Budget and Timing
How you renovate your rental property starts with timing. Are you doing this during a turnover, and you’re hoping not to lose more than a week or two of occupancy? You’ll want to focus on easy fixes. If you know you already have a tenant moving in, but they’re not taking possession for a month, you can spend some time on the smart home upgrades you may have promised.
Before you start any renovations, identify what your property really needs and how it compares to listings in the same area. Focus on renovations that tenants in your market are actively seeking. Next, prioritize projects with the greatest potential ROI.
You know what you’re willing to spend. Staying within budget is necessary in order to feel good about these renovations.
High-ROI Rental Property Renovations
As expert property managers in Los Angeles, we can tell you that these are the renovations that bring the most benefits to rental properties.
- Add Curb Appeal
First impressions matter. Make sure the exterior of the property is inviting and clean. Popular exterior upgrades include fresh paint, landscaping improvements, and modern door and window installations. These relatively low-cost upgrades can make a lot of difference in tenant perception.
- Modernize Kitchens and Bathrooms
Kitchens and bathrooms are two significant deal-breakers (or makers) for potential tenants. Focus on small upgrades with high visual payoff, such as installing updated hardware like faucets and cabinet handles. Replace outdated countertops with modern, durable materials. Add energy-efficient appliances to lower utility costs.
- Increase Energy Efficiency
This is a big one with modern tenants. Sustainability is a growing concern for residents. Energy-efficient upgrades like smart thermostats, low-flow plumbing fixtures, and LED lighting not only attract renters but also help lower operational costs. Offering a greener living space is a great way to stand out in a competitive market and attract high-quality tenants.
- Install Durable Flooring
Carpeting can easily wear down under heavy use, leading to constant replacement costs. Consider durable, low-maintenance options like vinyl plank, laminate, or hardwood flooring, which hold up better over time. They’re also better for tenants with children and pets, as there are fewer carpet fibers to hold onto allergens.
- Add Amenities Tenants Value
Understand what your tenants prioritize. There are a lot of remote workers renting homes, and office spaces with built-in shelving could make your property stand out. For single-family homes, install a fence in the yard so you can attract pet owners. Smart home technology is becoming more and more important to tenants. If you install a video doorbell, a smart thermostat, or a keyless entry system that allows tenants to sync their phones with some of their home functions, you’re going to appeal to a modern and well-qualified base of renters.
Balancing Cost and Value
While it might be tempting to go for luxury upgrades, balance is key. Focus your budget on renovations that boost practical value, improve tenant satisfaction, and align with local market demand. Over-personalization or over-renovating beyond your market’s average rental rate can diminish ROI potential. A garden tub is lovely in a home, but do your tenants really want it? Probably not as much as they want extra storage or quiet appliances.
Partnering with Property Management Professionals
To ensure successful renovations, work with professionals who understand your goals as a real estate investor. Contractors, property managers, and interior designers with experience in rental properties can help you maximize efficiency and avoid costly mistakes.
We love advising owners on what kind of renovations will deliver the most ROI to their investments. Whether you’re looking to increase your rent, prepare your property for a sale in a few years, or compete for better tenants, we’re here to help.
Renovating a rental property is a strategic way to grow your investment portfolio, and it all starts with a clear plan. Think about your tenants, your budget, and your short and long term investment goals. When you focus on high-impact changes and a calculated approach, you’ll see both value and rental income increase.
Contact us at Earnest Homes for a more customized set of recommendations for your rental property.
