If you’re looking to up your rental income, then renovating your property is the way to go. Not all rental renovations are made equal, however. Some renovations cost a fortune and generate nothing, or even worse, make you lose more along the way. Others are relatively inexpensive and help hit the bank. Here are the rental renovations with the highest ROI (return on investment).
Ditch the Carpeting
Carpets are becoming obsolete in real estate. Tenants don’t like them, they can get sticky and smelly quickly, and most of the time, they look prehistoric. The alternative? Hardwood flooring. It’s very durable, easier to clean, nice to look at, and more modern than carpeting. You still could stick with pretty carpets in bedrooms, but besides that, hardwood flooring should cover your rental.
Hardwood flooring is fairly expensive, but it still among the top renovations with the highest ROI. If your budget is limited however, there are some other similar routes you could take. Bamboo flooring or laminate options are cheaper alternatives that still get the job done.
Fix up the Bathrooms
Bathrooms updates are definitely among the most profitable renovations with the highest ROI. These renovations are also among the most essential too, since bathrooms are always under a tenant’s analyzing lens. These renovations do not have to focus on appearance; functionality is key. You could have a toilet seat made from gold, but if it can’t flush, don’t expect any tenants. Simple changes like replacing showerheads, faucets, and toilets can come a long way in this regard. Also consider having a handyman check up on the plumbing.
If the bathrooms are functioning properly, then you could decide to change up on their appearance. These renovations do not have to cost much either. Simple touches like adding a new shower curtain, changing the mirror, and repainting the walls refresh the vibe of the bathroom and keep tenants happy.
If possible, try to add an extra bathroom. This would be costly, and may or may not be possible depending on the property’s structure or local laws. It does, however, raise the value of your property and your rental income. Families and roommates will definitely appreciate having extra bathrooms. Having the number of bathrooms in proportion with the number of bedrooms is a huge plus.
Add More Interior Lighting
A brilliant (pun intended) rental renovation is to add interior lighting. This renovation will make tenants more appealed with your property, which will likely lower vacancies. Adding overhead interior lighting to bathrooms, kitchens, and the living room make a bright difference in your tenants and your rental income. If adding more lighting is unnecessary or not a possibility, then just replace old light fixtures with newer ones. Adding interior lighting may be somewhat costly, factoring in electrician costs, but it is still among the best rental renovations.
Upgrade the Kitchen
Renovations in the kitchen are among the rental renovations with the highest ROI for the same reasons as those for bathrooms are. Both are essential to proper living and both are heavily scrutinized by tenants. These renovations come in both ways, cheap or expensive. Either way, the income property’s value will increase.
Changes as simple as adding appliances like toasters or as complex as resurfacing the counters will increase the value of your property. If you plan on replacing or adding appliances, aim for black models. They’re typically favored more by tenants. If you’re looking to resurface counters, stick to stone.
Install Other New Appliances
We’ve mentioned toasters as kitchen appliances to have, but there are so much more you could add to your property. Heating and cooling systems are pretty much necessary. If your properties do not have them, strongly consider adding some. If you have some extra space lying around (preferably in the bathroom) add a dryer and a washer. Tenants do not usually expect properties to have them, so they’ll be very pleased to find them. Adding TVs will lead to higher returns as well. Other kitchen appliances like microwaves, blenders, and refrigerators will also add more money to your rental income.
Parking space is a huge need for tenants. Having a garage or driveway is great. If your property does not have one of these, consider adding a garage or a carport. Adding a garage is obviously a pricier investment, but a carport can be just fine. Either way, you’ll be in for a higher return.
Adding an Additional Bedroom
Adding another bedroom definitely isn’t easy, but it still is one of most profitable rental renovations. Converting a one-bedroom rental to a two-bed will make your tenants and your wallet (in the long-run) happy. If you aren’t restricted financially, you may be restricted legally or structurally. Have the property inspected before you plan on constructing another bedroom. And of course, make sure it’s legal by applying for the proper permits.
Add Extra Storage
And to conclude our list of rental renovations with the highest ROI, we are left with adding extra storage. Removing unnecessary walls can transform the space in a property. For cheaper and easier renovations, try adding built-in shelves and closets.
Some of these rental renovations require more time and resources than others, but the general effectiveness of these renovations is the same. But remember, for some areas of a property, functionality supersedes appearance. Keep both in check, but functionality is way more important.
Aside from these renovations, perform periodic checkups on the properties. Fixing simple problems at time’s notice will keep your tenants satisfied. Always have a handyman’s contact for such situations. If a handyman is not always nearby, it’d be a good idea to know how to perform simple fixes by yourself.
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