Renovating a Rental Property 101 - Increase Your Investment Property's Value
Once you've purchased an investment property, your primary priority is to start earning money as soon as possible. One of the most popular ways to begin profiting is by renovating a rental property.
However, it's no secret that the more money you put into your home, the more it will value and the higher your return on investment will be. That is why it is important to understand the value of renovating a rental property and how it can be done to generate meaningful returns early and effectively.
Whenever you plan on renovating a rental property, it is essential that you take the time to assess your options. While colorful landscaping or pricey lighting fixtures may allow you to express yourself, they're rarely the most effective approach to increase the value of your rental property investment. Instead, invest in small, everyday upgrades to increase the home's appearance and value without being overly spectacular.
Learning which areas to prioritize while renovating a rental property will pay off in the long term and will help you become a more successful real estate investor. You'll get more money out of your asset by renting it out to renters, and you'll get more value out of it when it's time to sell it.
However, before you can start renovating a rental property, it is important to secure the financing you need in order to build a strong renovation budget.
That is why we want to offer you a free strategy call so that we can help you draw out the funds you need in order to succeed while renovating a rental property. All you need to do is click the link below.
Renovating a Rental Property Can Increase Property Value
Typically, the best rental renovation ideas are the ones that provide the best return on investment, improve the property's attractiveness and convenience. Fortunately, most baseline improvements are both inexpensive and simple to implement. Here are a few things you should do when renovating a rental property in order to achieve these goals.:
Vinyl siding should be replaced
While it may not be as thrilling as some other sorts of improvements you could make while renovating a rental property, replacing the vinyl siding on your home can significantly improve its resale value and exterior appeal. With new vinyl siding, you can choose a color that stands out and sets the asset apart from the rest of the area. Vinyl siding can also help you save money on your utility bills by increasing energy efficiency due to it's strong insulating properties.
Roof replacement and maintenance
A building's roof is sometimes the most expensive single component, but it is also is one of the most important to maintain. Replacing an aged roof before renting a property might help you get a far greater price for the home on the rental market. A new roof improves the asset's curb attractiveness as well as its energy efficiency. Repair costs can be reduced if you replace your roof before it becomes necessary.
As well, you can save tons of money on missing rents and expensive repairs if you take the time to check the roof whenever you are renovating a rental property or performing routine maintenance. This way you can catch problems early before they evolve into larger disasters.
Basement remodel
If you're renting out a single-family house, you should consider converting the basement into a livable space. It is an excellent option to increase the value for both renters and prospective buyers in the future. Consider remodeling the basement of a multi-family house into a community facility, such as a laundry room, storage center, or game lounge. By converting an underutilized basement room into a comfortable living area, you may enhance the square footage of your property.
In some cases, you may be able to convert the basement into an additional dwelling unit (ADU). That means that off a single property, you could start to earn multiple streams of income. That versatility alone makes basement remodeling one of the best improvements for rental property success.
Window replacement
While new windows aren't usually noticeable, they can help create a more environmentally friendly structure. Coated windows can help trap heated air inside throughout the winter. They keep the warm air outside in the summer, thus preventing harmful UV rays from entering the building.
However when you are planning out what you will be doing while renovating a rental property, it's usually a good idea to replace windows at the same time as the building's vinyl siding.
Bathroom renovations
One of the deciding factors for prospective tenants and buyers before moving into a home is the bathroom. Investing a little money in the bathroom while renovating a rental property could go a long way toward impressing future renters and other investors. Consider installing a luxurious toilet seat, a more oversized sink, and a more luxurious tub. Even simple measures such as adding extra wall mirrors can help.
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Large Projects to Consider While Renovating a Rental Property
Here are a few full-scale makeovers to consider if you're looking for a more significant return on your investment and have the funds to make large-scale improvements while renovating a rental property. These will significantly increase the income you can drive through forced appreciation but at a considerably greater price.
Make the your rental property more smarter
Installing smart home technology throughout the structure is one approach to increase the value of your investment asset. This not only appeals to a younger, more tech-savvy professional audience, but it also improves your building management approach and lowers running costs.
Add a secondary suite
If your principal building has a lot of back-lot space, consider adding a secondary suite or granny flat. If you rent out this extra area as a house, vacation rental, or even just a community room for your current tenants, you may be able to charge a higher rental fee. Unnecessary space on your house might be put to good use to increase its overall value.
Add a deck, patio, or sunroom
Installing a deck, patio, or sunroom on your investment property can significantly increase the amount of living space with relatively little effort. When the weather permits, these low-impact structures may be created in as little as a day and provide your people with a fun place to spend time when the weather permits.
Build an addition
While this is the most extreme things you can do while renovating a rental property you can make, adding on to your home is a proven way to increase the value of your investment. Residents and future buyers will benefit from the additions, which will increase their living space and improve their quality of life.
Smart investors know how to assess a property and identify which types of modifications are most appropriate. Examine your investment property carefully and consider whether renovations are suitable for your objectives as an investor.
Utilizing your remaining cash to make a few easy home renovations will help you get a better return on your investment in the short and long run. Forced appreciation may be more expensive up front, but it's an attractive investment for long-term investors.
Financing for Rental Property Renovations In Your Area
If you are planning on renovating a rental property, look no further than your existing portfolio for financing. If you would like to learn how to use your existing investments to financing a renovation project today, all you need to do is book a free strategy call at the link below.