Many times, property improvements and upgrades mean you can charge premium rents; however, with so many possibilities when it comes to home and apartment improvements it can be difficult to decide exactly which improvements have the best returns. You don’t want to spend thousands of dollars on something just to see tenants disinterested and unwilling to pay. Therefore, we’ve compiled the top property improvements to implement that have the best return on investment.
Kitchens and Bathrooms
Kitchen and bathrooms are almost always top selling points for new tenants. When choosing designs, stick to a classical style in both the kitchen and the bathroom so that the rooms will be appealing for longer periods of time and will therefore require fewer upgrades in the future. Because granite and marble countertops have mass appeal and will last longer than any other materials, you should stick to these surfaces, rather than going with a cheaper option. If you are strapped for cash for your property improvements, update your kitchens for less by repainting the current cabinets to freshen up the room. Should you budget be slightly larger, opt to add an island to the kitchen to increase storage and counter space, or knock down non-essential walls to open the space up and make it larger.
In both rooms, pick tile floors that are light but have dark grout; this will lighten up the room, while also hiding the inevitable dirt that will accumulate. You should also try to add as much storage to the bathroom as possible. Pick a vanity with cabinets rather than a pedestal sink. You can also add cabinets outside of the bathroom but nearby for linens and overflow bathroom storage.
Because your property’s curb appeal may turn away potential tenants or draw them in, you should focus on exterior upgrades as well. Studies show that siding, window, and roof upgrades will give you the biggest returns on your investment. Not only do these upgrades improve your property’s exterior aesthetics, but they are also necessary for preserving the property’s structure.
Upgrading your property’s landscaping is a more cost-effective option for improving your curb appeal. Make sure that your landscaping is low-maintenance because your tenants probably won’t be interested in any sort of upkeep on their end. Even if you cannot afford to make property improvements to the landscaping, you should make sure that the landscaping is recently maintained before showing the property to tenants; cut the grass and prune any trees or shrubs.
Additional exterior updates that improve a property’s safety can be smart investments. Install a new front door that is secure and has the proper safety measures in place to protect both your tenant and the property. Invest in extra locks, peepholes, outdoor lighting, and additional safety measures to help tenants feel at ease when they are on your property. Safety is many renters’ number one priority, and they will be willing to pay extra to ensure their place of living is safe.
Not only are energy saving upgrades good for the environment, but it also can save you money in the long run. Tenants are often more attracted to units with energy saving measures installed because it can save them some money on their utility bills. Because the majority of homes’ energy loss comes from a property’s windows, energy efficient windows will decrease energy loss and update the property’s appearance. If you do replace the windows on property, do not forget about replacing the windows in basements and attics even if the space is not in use. Hot and cold air will seep out of these locations, so replacing them will limit the amount of energy used. It will also give you the chance to install safer windows that secure any potential entry points for intruders.
Roof upgrades will also save you and your tenants money because older roofs tend to allow for more hot and cold air to escape. Although replacing a property’s roof will be expensive, it will provide energy savings for many years before needing to be replaced again.
Other energy saving upgrades include adding ceiling fans throughout the dwelling so that tenants will spend less time using the air conditioning on hot days. You can also invest in energy smart appliances, which will save you money on water and energy bills. Depending on your state, you may also be given rebates for installing energy saving appliances, which is another financial benefit.
Smart home tech is more affordable and accessible than ever and can be used to command premium rents. Studies show that gadgets provide the best returns when installed in mid-range homes rather than low or high range properties, so keep this in mind when deciding whether or not to install any smart technology.
Smart door and window locks are convenient upgrades that will only cost you around $200-300 to install. Smart locks allow you and your tenant to lock and unlock the door remotely with a mobile app. You and your tenant can authorize others to have temporary access to the locks, such as plumbers or electricians making repairs. This type of upgrade provides tenants with increased convenience and peace of mind about their safety.
Smart thermostats cost a few hundred dollars and allow tenants to control the unit’s temperature by smartphone both in the home and remotely. This means tenants can turn their heat and air conditioning off should they leave the dwelling and forget to do it. Many smart thermostats will also automatically adjust temperature settings based off of the tenants’ previous habits. You’ll also only need to install one system, which makes it an affordable upgrade.
Smart security systems may cost more than just one or two smart locks, but they will provide your tenants with the greatest sense of security that today’s technology can provide. Gadgets to invest in include video recorders inside and outside of the home, microphones, motion and noise detectors, and other smart security system features. Many systems will allow tenants to set up alerts when they are away or asleep that will notify them if a noise or motion is detected.
There are additional safety features you can install to make your tenants even more comfortable. Smart smoke detectors and carbon monoxide detectors often cost less than $200 and make stereotypically annoying safety features easy to control. Tenants can easily control false alarms and low battery alerts from a cell phone app. The app will also notify you and your tenant if you are away and fire or carbon monoxide is detected.
Virtual assistant built-ins can be used to easily elevate your property from a regular home to a smart home. There are multiple virtual assistants on the market that will cost you only a few hundred dollars to install, such as Amazon Echo, Apple HomePod, and Google Home. These smart home systems can be programmed not only to play music and answer questions, but also to turn on and off other smart home gadgets, including lightbulbs, smart kitchen appliances, and smart TVs. If you do install a smart home system along with a few other gadgets, you can advertise your home as a “Smart Home” and command higher rents.
Smart kitchen appliances are the least cost-effective gadgets to install, but they can be used as a selling point for the property. Smart appliances include coffee makers that can be controlled through smart phones, refrigerators with televisions and texting capabilities, and Bluetooth enabled utensils. Because these can be more expensive than any other smart home gadgets, carefully consider your target renter and current rental market before making an investment.
Adding additional space to your property is another way to upgrade your property in a way that provides solid returns, especially if the property is in a location where the rental market is hot. Renters will be willing to pay higher rents for additional bathrooms, bedrooms and storage space. Bathroom additions are the most likely to get you the highest returns; renters will justify paying higher rents for their own bathroom, rather than for a bigger living room or yard.
You should, however, avoid adding to much space to units that might price potential renters out of the neighborhood. If the price for your unit is too high in comparison to other rentals, it will be harder to find a tenant willing to pay, even if the amount of space matches the price. Be mindful of this when choosing space upgrades, because they can be costly; therefore, you’ll want to ensure the space makes sense in your neighborhood.
Whenever you are considering making property improvements, never choose aesthetic upgrades over necessary maintenance needs. Before installing a smart lock, you should make sure that your roof does not need to be replaced. Your number one priority as a landlord should be keeping the structure sound and making sure the dwelling is habitable. If the property becomes uninhabitable, your tenants can sue you for damages, even if you have the most popular (but unnecessary) gadgets. Therefore, it is important that you resolve leaks and foundation problems before updating kitchens and bathrooms. Ultimately you should never choose form over function because it will likely cost you more money in the long run.