During the recent real estate crisis, many investors purchased foreclosure properties that were in less than desirable condition and turned them into rental properties. A frequent question is how to increase rent through renovation. A rental property that is in good condition will be able to command a higher market rent.
There is a matter of concern, however. There comes a point when the costs of renovation cannot be recouped through rent or the time it takes to recoup the initial cost does not make a good investment decision. Let’s take a few moments to discuss some renovation and improvements that will increase rental profitability.
Clean Units Command Higher Rent
A simple and very cheap way to increase rent for your space is to present a sparkling clean rental. Consumers equate value with cleanliness. If you take the time to thoroughly clean your units after a tenant moves out, you can expect to have a good response from your prospective tenants. Clean the carpets, wash the cabinets, scrub the grout and deep clean the appliances. A little elbow grease goes a long way.
New Paint Equates More Rent
Along with deep cleaning your rentals, putting up a fresh coat of paint is a cost effective way to make the best impression on a new tenant and justify an increase in rent. It goes a long way to justifying a higher rental. Choose neutral colors and use a paint with a high durability and one that is easy to clean in the future. Consider an eggshell finish, it is easier to clean than flat paint.
Increase Rent by Installing Washer and Dryers
Laundry facilities are on the top of the list of tenant wants in a rental unit. Installing even a stacking washer and dryer in a closet can easily gain a rental increase of $50 to $80 per month.
Update the Kitchen and Tenants will Gladly Pay More
No one likes to cook in a dingy old kitchen. If you carefully renovate this area, tenants will gladly pay top dollar to rent your units. If your cabinets are outdated, rather than replacing them, consider resurfacing them. Installing new faucets and hardware can quickly make an old kitchen look new. If you want the look of granite, consider concrete countertops. When installed professionally, you can get the look of granite without the costs. When it comes time to replace the appliances, opt for stainless steel (or the look of stainless).
When a landlord opts to complete some renovations, they can expect to see rental increases of between 10 to 30 percent. When it comes to renovating your rental properties, it is important to remember that this is a rental property and not your personal home. If you over renovate, you will not be able to recoup your investment. Refer to the Cost Vs. Value Report for more information. Keep it clean, simple and in good condition and you will be able to command the highest possible market rent.