If you own a rental property, you should take a serious look at investing in it this year. By putting some of your revenue back into the property, you can both boost its value and make it more attractive to prospective renters at a higher rent. In this article, we’ll discuss the 5 most cost-effective ways to boost the value of your property in 2020.
1. Focus on function over form
This is where the priorities for homes and rental properties diverge. When making upgrades and renovations in your own home, you’re probably not weighing the bottom line as heavily as you are considering what looks good and what you like. Sure, you may make cost-conscious remodeling choices, but you probably won’t think twice about choosing a tile that costs 10 cents more per-square-foot if you like it more.
In a rental, the calculation is different. First, you need to be strict with the scope of your investment in the property. Going over budget likely means losing money. Second, you need to appeal to a wide variety of prospective renters, not just your own personal taste. Our recommendation is that you prioritize function over form. Choose materials that are durable, usable, and practical over those that are luxury items. For example, a quartz countertop is a better fit for the kitchen than a marble one, and renters will probably appreciate updated appliances more than travertine tile.
2. Make the right first impression
Ask any realtor or property manager, and they’ll tell you: curb appeal matters more than ever. Today’s homebuyers and renters will most likely find your home, condo, or apartment online. Your place might have 10 seconds to make a good first impression. Here’s how to make it count.
First, start by having the exterior repainted. It’s amazing what new exterior paint can do for a property’s value and curb appeal. It sends powerful subliminal messages to prospective renters that your rental is well-maintained and cared for. At the end of the day, that will help attract the very best renters to your property.
On that note, you should also give the landscaping a fresh look. Trim down overgrown trees and bushes, and make sure that grass lawns are verdant and freshly cut—especially in the front yard.
3. Upgrade the kitchen and bathrooms
If you do have money to invest in remodeling your rental property, start with the kitchen and bathrooms. Renovations in these spaces generally have the highest return-on-investment for property owners, and a new kitchen or master bathroom will also attract prospective renters.
Again, to bring things back around to “function over form,” limit your upfront costs by focusing on how renters will use the space. For example, an open kitchen may be a costly addition when—in truth—prospective tenants would appreciate a larger pantry more. Unless you’re targeting a luxury market, you do not want to sink tens of thousands of dollars into a remodel. You can’t go wrong by focusing on value and practicality.
4. Stretch your dollar with smaller projects
Not every upgrade to your rental property needs to be a big-ticket project that takes weeks to complete. There are plenty of small, inexpensive changes that can enhance the value of the property and make it even more appealing to renters. For example, take a look at lighting in the kitchen: too many kitchens still use harsh fluorescent panel lights that make the kitchen feel clinical instead of cozy. Switch those out for recessed lights and hang pendant lights over the island for a more intimate, warm kitchen that better fits the needs of your renters.
We’ve already mentioned painting the exterior of your property, but interior paint is a gamechanger. It’s also one of the few projects that every property owner—no matter how handy they are—can tackle themselves. You’d be surprised what some fresh paint or a strategically placed accent wall can do for a property.
5. Add storage to your apartment or condo
Talk to many renters, and they’ll identify this as a major need in most apartments and condos. Often, the square footage of the place is fine, but the storage options—cabinets, closets, pantries, and more—are seriously lacking. No renter wants to also rent a storage unit in addition to your property. Adding more storage is always a good call. This may be something as simple as mounting cabinets or shelving above the laundry machines, or adding wall-mounted racks to a single-car garage. Your future renters will appreciate your eye for practicality.