What upgrades make the most sense for a rental property? When rehabbing a rental property, there is an inner struggle that is bound to happen: "Will a renter take care of the upgrades I've done? If I don't upgrade, will I attract the renters I want?"
Both sides are valid. While you would take care of the property, you cannot be sure a renter will be careful with the new wood floors or the upgraded washer. However, if you don't change out that old carpet, will you get the rent and the renters you want? Maybe not.
The key is to find the line.
What upgrades are worth doing on a rental property?
1. Improve the curb appeal
The first thing a prospective tenant sees when they visit a vacant rental is the outside, so it's a good idea to boost your property's curb appeal.
Make sure the outside is painted nicely, the landscaping is pretty (and low maintenance), and the curtains/shutters are high quality (or that you at least have blinds on the windows). These are the first things people see when they visit your property, and an unappealing exterior might mean they will never see the inside.
When I decided to rent out my property, the first thing I did was hire painters to paint the exterior. Before, I lovingly referred to the color of my house as "Old Band-Aid." But once the painters were through with it, my house was downright beautiful, and I got more than the average rent for the area.
2. Add energy efficient appliances and add-ons
Today's renters care about energy efficiency. It is a great plus to have a building automation system, like a Nest, installed. Renters can choose their temperature settings and make smart decisions to save money on utility bills.
Adding energy efficient appliances is helpful, too. Energy Star appliances can save money over time. On average, Energy Star appliances save about $75 per year.
3. Upgrade door locks
Did you know that landlords should re-key the locks between tenants? An easy way to do that is through smart locks. A quick upgrade of the locks can save you money every year. The key to a good smart lock (pun intended) is the ability to quickly change the code or access.
Look for a smart lock that enables you to change the access settings from your phone. You can "re-key" for a new tenant quickly from your phone. You also have the option to create temporary access for maintenance personnel, cleaners, and property managers bringing new prospective tenants.
4. Do a big impact interior refresh
When choosing what to tackle inside the home, think big impact. Refinishing wood floors, painting the walls, and upgrading the counters all have a big impact with a manageable price tag. When a prospective tenant comes into the unit for the first time, the impact will be instant. The items you are focusing on are big and will demand notice.
My first rental property had scratched-up floors, yellow paint, and hideous counters. For under $2,000, I refinished the floors and painted the entire unit. The unit looked completely new and fresh. For reference, my unit was up for rent for a month before I decided to make these upgrades. Afterwards, it leased after the first showing.
After you make these upgrades to your rental property it's important that your rental price matches shows the improvements you made not only to increase your rental income but to be competitive in the market. When you list your rental on Apartments.com, we provide you with free rent comparison reports. This valuable information gives you a clear understanding of the market so you can price your rental right, compare your property’s value to other similar properties, and review market conditions like the average days on the market and the average rent rates. In addition to this valuable information, your rental home will appear on all 12 of our network sites to help you reach potential renters where they’re searching. By listing on Apartments.com, you can reach millions of renters and fill your vacancy fast.
In conclusion
When deciding what upgrades to make, think big picture. What has a big impact both visually and financially? Large impact items like the exterior of the home, interior paint, and flooring instantly change the feel of the property and add value. And items like smart locks and energy efficient upgrades increase the value of the property and save you money throughout the years.
Choosing the right upgrades can increase your quality of tenant and your bottom line.
