Rental property owners are running a business and need to focus on the bottom line, keeping expenses to a minimum. While some property improvements are a necessary expense, others may prove useful for less obvious reasons, such as improvements that lead to greater interest from prospective renters. Here, we’ll dig into the types of property improvements that pay off and those that don’t.
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Which rental property improvements lead to better first impressions?
One benefit to improving your rental property is marketing. You want to attract more tenants to your property and you want to provide features that make tenants willing to pay more. That means creating a great first impression so that tenants think your property is better than others right from the start.
Since prospects start their visit on the outside, make sure you greet them with a neat yard and a building that is aesthetically pleasing on the outside. On the inside, fresh paint, new carpeting, and a clean environment also help to create the feel of a new home. New appliances are another visible way of showing that you maintain your property and that your tenants have all the modern conveniences.
What are rental property improvements that don’t pay off or take a long time to pay off?
Doing a major kitchen upgrade, while being a potentially fun project, can end up costing a lot of money when all is said and done. You might start with the idea that you’ll replace the cabinets, but then realize that the cabinets you want won’t go with the existing countertops and flooring. One thing leads to another, and you end up with a new kitchen in your rental, but a large bill that will not necessarily lead to tenants willing to pay higher rent.
Another thing to avoid is combining rooms or rooms and closet spaces to make larger rooms. These types of renovations are expensive and it’s not clear that they pay off over the long run. While you might find one renter who places extra value on an oversized master bedroom, more renters are likely to want that extra bedroom or walk-in closet.
When you’re doing the math on whether an improvement is worth it, keep in mind that many improvements are tax-deductible, either immediately or over time.
Which rental property improvements lead to increased property values and higher rent?
Once you cover the basics, you can command a premium rent by adding premium features. This is about knowing your market and looking at comparable properties. For example, you might see that half the rental homes in your area have pools and those homes demand 10% higher rent on average. In other areas, the pool might not add any value. Once you figure out the rent premium, you can determine when you will make your money back.
Another idea is offering expanded parking if you are in an area with limited parking or want to make your home attractive to roommates. On-site laundry can be another hard-to-find perk in some neighborhoods. Pet proofing your home can allow you to charge extra rent for pets while reducing the risk of pet damage.
What are routine cleaning and maintenance tasks that will increase the value of rental property?
One thing you might consider is having a professional cleaning and painting after every tenant turnover. This reduces move-out hassles and disputes that could leave you with a negative review while making sure your property is in great condition for the next tenant.
Many landlords like to change air filters and conduct preventative maintenance checks every 3, 6, or 12 months. This helps to protect your appliances and identify other problems. These maintenance checks could also help you avoid the expense of an emergency repair if you catch a problem that would affect the tenant’s habitability. You might also discover a problem tenant who is damaging your property, making it possible for you to evict them before they do even more damage.
Rent Confidently Using Rocket Lawyer
Being a landlord is not easy and often leads to a variety of legal issues and questions. Rocket Lawyer is here to help you rent with confidence using professional documents to manage every aspect of your rental business alongside attorney advice and assistance when you have questions about your documents or a specific legal matter. All Rocket Lawyer Lease documents are digital signature-ready using Rocket Sign. If you are using your own documents, you can upload them to your Rocket Lawyer account and add text, date, and signature fields for digital signing as well.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.