Amenities are an important feature that renters consider when looking for their next home. In the past six months, keywords related to luxury were searched 1,225 times on Apartments.com, and in a recent Apartments.com survey, 25% of respondents said amenities were among the top 3 important factors when selecting their next residence. Taking amenities a step further and upgrading to luxury amenities can offer a range of benefits, from attracting tenants to boosting rental income. However, luxury amenities are not the best fit for every property and landlord, so weigh the pros and cons to help you make a decision that suits your situation.
- What are luxury amenities?
- The benefits of luxury amenities
- The cons of luxury amenities
- Are luxury amenities worth the investment?
What are luxury amenities?
A luxury amenity is a high-end feature or service that enhances the life of tenants, often found in luxury apartments or homes. They don’t necessarily have to be expensive enough that they break the bank, but they are a step above what is typically found in rentals. These features enhance a renter’s living experience with greater convenience, comfort, and entertainment.
Categories of luxury amenities
Luxury amenity is a wide term that encompasses a lot of different features, which is why breaking them up into different categories can help you see what could work with your property.
- Indoor amenities
- Granite countertops
- Smart technology
- Eco-friendly amenities
- In-unit washer and dryer
- Hardwood floors
- Walk-in closet
- Balcony/patio
- Fireplace
- Stainless steel appliances
- Outdoor amenities
- Pool
- Hot tub
- Gym
- Spa (sauna, cold plunge, steam room, etc.)
- Pet facilities (pet spa, pet park, etc.)
- EV charging
- Game/media room or movie theater
- Entertainment spaces
The top amenities renters want
In January 2025, Apartments.com surveyed 20,000 Americans planning to move into a rental. One of the questions identified the must-have amenities or features for renters in their next rental residence. The top five were in-unit laundry, air conditioning, dishwasher, off-street parking or garage, and a balcony/patio/private outdoor space. To upgrade those basic necessities into luxury amenities, you could get stainless steel appliances or add additional features to the balcony, like an outdoor bar or kitchen.
According to the Apartments.com survey, in terms of luxury amenities, responses for must-haves were:
- Balcony, patio, or private outdoor space: 45%
- Smart lock: 13%
- Smart home appliances: 12%
- Sports court: 4%
- Electric vehicle charging: 3%
Be aware that trends can change; what might be considered luxury now may not be luxury in the future. However, some trends are unlikely to change, such as stainless-steel appliances.
The Benefits of Luxury Amenities
How luxury amenities increase rent prices
Deciding how much to charge for rent can be a challenging balancing act. Upgrading to luxury amenities can justify an increase in rent price, paving the way for a higher profit margin. In addition, you can add fees, like an amenity fee, to help cover the initial investment and cost of maintenance.
Boosting property value and ROI with luxury amenities
Installing luxury amenities can increase the value of your property and its ROI. Luxury amenities are improvements to the property which increase the property value, condition, and marketability. While adding these amenities do have upfront and maintenance costs, if you charge the right amount for rent and other fees, you can significantly boost your ROI.
Reducing costs and maintenance through luxury features
Amenities break down over time, and issues become increasingly frequent as the amenity ages. Luxury amenities can last a long time and withstand quite a bit of wear and tear. From the recent survey, 62% of respondents said that concerns about maintenance or condition of property, unit, or appliances were a deal breaker.
Besides saving you time and money by requiring fewer repairs, if you get energy- or water-efficient amenities, they can lower your utility bill. This means you are spending less time and money on maintaining old things.
Improving occupancy and tenant retention with luxury amenities
Luxury amenities help you meet renters’ needs and desires and stand out from the competition. When those needs and desires are being met, renters are more likely to choose you, increasing occupancy and tenant retention rates.
The Cons of Luxury Amenities
High initial costs and investment with luxury amenities
Like any improvement or addition you make to your rental, installing luxury amenities has an initial cost and investment. Since these are premium changes, they can cost more than a normal upgrade. It can seem steep, but you can recoup those costs with proper rent pricing and fees and get a bigger profit.
Increased maintenance tasks and costs for premium features
If you add an entirely new feature like a pool, you will have to maintain those amenities. This can increase the maintenance tasks and costs, but you can raise rent and charge additional fees to help cover those costs and time spent.
Are Luxury Amenities Worth the Investment?
One of the first steps in your decision-making process should be determining why you are interested in luxury amenities. Do you want to be able to charge more for rent? Are you trying to decrease vacancy rates? Knowing how luxury amenities either do or don’t suit your needs helps you determine if the investment is worth it.
Your next step should be figuring out how an upgrade to luxury amenities would affect your property and finances. Calculating your ROI is a great way to see the effects of luxury amenity upgrades on the profitability of your investment. To get a view of the market and competition, rent comp reports will give you in-depth insights into your local area and comparable properties.
How to calculate your ROI
Return on Investment (ROI) measures the revenue your property generates as a percentage of its cost. Calculating your ROI will tell you how profitable your investment is and help you see how luxury amenities will impact your financial performance. Crunching the numbers can be time-consuming and a lot of work, so Apartments.com created a Rental ROI calculator that does it for you. Using the rental property calculator is easy; collect your expenses and income, then fill in all the required information.
For example, if you install a swimming pool or granite countertops, it could increase your rental income and reduce vacancy rates, leading to higher profit margins. It may take some time until you see those increased margins as you have to pay off the initial investment. One way you can use the rental property calculator is input all of your expenses and income before adding any luxury amenities and record the results. Then, do the same process but enter the increased rent price you would charge and factor in the cost of the renovation. Then, you can compare those results to the ones you saved from before.
Using rent comp reports
Another way to help you decide if you want to install luxury amenities is by looking at the market and comparing similar properties using rent comparable reports. Rent comp reports on Apartments.com give you all the information you need. They can help you determine what luxury amenities would be worth investing in as it depends heavily on your area; you don’t want to price yourself way higher than the average rent in the neighborhood. Consider adding amenities that allow you to get the costs back and make a profit but not amenities where you would have to charge an exorbitant rent to make the investment worth it or would price you out of your area’s rental market.
For example, let’s say your area’s average rent is $1,500 and you are considering installing a pool that costs $40,000. To afford this upgrade, you would have to charge $2,500, or an amount much higher than the average rent in your neighborhood. This upgrade would not be a good idea because you are less likely to attract renters with a rent way above the average. An addition that would make more sense would be smart home devices; you could still increase your rent but keep it around the average as the installation cost is not as high as a pool. The average rent price is one of the main reasons that people look at an area; if you price way out of it, then you won’t attract renters.
FAQ
How do I add luxury amenities with a limited budget?
Luxury amenities can be expensive, so if you are looking for a more budget-friendly option, then start small. Adding smart home devices can be an affordable upgrade with many benefits.
What is the monthly cost to maintain luxury amenities?
The monthly cost varies as it depends on what luxury amenities you offer. Some are relatively inexpensive, like upgrading to hardwood floors. These are durable and won’t require much maintenance. However, if it is something like a pool, then you will need monthly maintenance which can cost a bit, but you can charge more for rent or add an amenity fee to help cover the price.
How do I market my property after adding luxury amenities?
Making sure you highlight your apartment’s features is one of the best ways to attract renters, as 66% of respondents said they were interested in information about features, such as in-unit appliances and materials, in a recent survey by Apartments.com. To market your house successfully, high-quality photos, adding videos, and showcasing your property on social media are other methods to engage those searching.
How do I calculate my ROI?
You can calculate your ROI by doing a couple of quick calculations after gathering all your financial data and information. First, you calculate your net profit with the following formula:
- Net profits = investment gain – investment cost
Then, you would use the result to get your ROI:
- ROI = net profits ÷ investment cost
- Or you can use: ROI = (investment gain – investment cost) ÷ investment cost
It can get a bit more complicated when you consider all the different aspects of financing a home like whether you paid cash, mortgaged the property, or are trying to figure out the home equity. Make it easy on yourself and use the ROI calculator on Apartments.com, which does the calculations for you.
