One of the questions I get asked most frequently by new landlords and real estate investors is, “Annetta, when is it time to update my rental unit?”
The answer? Well, it depends on a lot of things. First, you’ve got to examine your financial goals, as well as what tenants in your location want and need. Not all properties and target audiences are the same, so identifying your market in the beginning will save you a headache down the road.
There are some renovations that are necessary as homes age. Roofing systems, plumbing infrastructures, and electrical wiring are all examples of potential expenses you encounter as a landlord or real estate investor.
Below I go over all the things you should—and shouldn’t—be doing when updating your rental property in Michigan, or anywhere in the United States for that matter. But first, let’s cover the basics.
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Updated Rental Properties Attract More People
It’s no shock that people searching for a rental home or apartment are more attracted to listings that feature the word ‘updated’ in the description. Knowing which property upgrades are worth the expense is vital. If your objective as a landlord is to find and keep great, reliable tenants, there are some updates that can add substantial value.
What Updates or Expenses Are Worth the Investment?
To attract quality tenants and lessen the number of repairs needed in the future, it’s key to invest only in updates that are the most practical, profitable, and cost-effective. For example, spending money on swanky countertops in an area that doesn’t permit increasing the rent to get a return on the costs of the upgrade simply does not make financial sense.
What does make sense is weighing all your options before undergoing any renovations.
Here are a few worth considering:
Hiring A Professional Cleaning Company In Between Renters
Before anything else, you should invest in a professional deep cleaning service after every tenant. For an average of around $175 per rental property, you can revamp the space and make it look, feel, and smell brand new. And not for nothing, but renters appreciate a clean home. Right away you’re showing them that you care about the property, as well as their comfort in it. It also encourages them to take better care of the space themselves.
Update the Light Fixtures & Apply Fresh Paint
Applying a fresh coat of paint and installing new lights and bulbs are both inexpensive ways to give the interior and exterior of your rental unit a face lift. Pay special attention to properties with less windows since they limit the amount of present natural light. Renters will always appreciate having more lighting, especially if it’s in addition to a ceiling fan. Best of all, freshly painted walls and lighting could make a small bump in rent justifiable.
Fix or Invest in New Appliances
As a renter, few things are more irritating than having an appliance or plumbing on the fritz. Whether it’s a broken HVAC system, a faulty refrigerator, or clogged drains, failing to fix or replace them will cause quality tenants not to renew their lease. When choosing appliances, opt for ones that are Energy Star rated. Tenants swoon at the idea of spending less money on their electric bills each month.
It’s also important to remember to respond to your tenants quickly when an issue does arise and keep them in the loop until it’s resolved. If renters feel like they’re being taken care of they’re more likely to stay.
Upgrade the Kitchen Countertops
Earlier, I used countertops as an example of installing something expensive that may not yield a return. That’s still true if the area prohibits you from raising the rent to justify the cost. However, if most of the other rental properties in your complex or neighborhood have updated their kitchen countertops, but you haven’t, it’s time to consider it.
Sure, it can be a little more costly, but features like quartz or granite countertops attract high-quality renters who are more financially stable. If that’s your target demographic, making your property stand out with luxurious upgrades in the kitchen is an excellent way to do it. Not to mention it also increases the property value of your unit or building.
Replace the Flooring
Putting down new flooring definitely isn’t the cheapest update you can make to your rental unit, but it can certainly be worth it. Switching out heavily trafficked carpet with a durable tile or hardwood—especially in the main living areas—is always a hit with higher-income renters.
Like the countertops, changing out the flooring in your rental property is a great way to warrant charging higher rent to tenants who are more reliable.
Real Estate Investment & Landlording Experts
Being a landlord is both challenging and rewarding. Having that passive stream of income each month is great, and it gives many people the financial freedom to spend more of their time doing things they enjoy.
If you’ve been looking at starting your own real estate investment journey or becoming a landlord, I can help! With over a decade of experience, there isn’t much I haven’t seen. If you’re ready to be the entrepreneur of your own dreams, contact my team today.
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