Renovating a Rental for Maximum Return

Renovating a rental unit is an opportunity to stand out from competition and increase your return. Renovations to rentals need to improve property value and renter satisfaction to optimize net operating income. Before you begin:

• Determine property value. Estimate your property’s value based on the market rate in the neighborhood or use a home appraiser.
• Define your base rent. The average monthly rent is approximately 1 percent of total property value. Determine a base rent before your renovations to decide how much you can invest in your property.
• Evaluate the competition. Find out what similar rentals cost in your area to figure out how much you can invest in your property—and raise rent—without pricing out of the market.
• Assess your investment potential. Determine what you can invest in a renovation from your base rent, competition and budget. Prioritize projects that add the most property value.

Start with kitchens and bathrooms. Kitchens and bathrooms are growth opportunities. They offer the most appeal for potential residents and are key rooms in increasing property value.

Tour ‘for rent’ and ‘for sale’ homes in the neighborhood for renovation ideas. Get a look at the competition potential renters will be considering and see which designs are most enticing.

Some design choices may not be right for a rental property. Bright, light-colored kitchens have decorative appeal, but they stain easily. Wood tones and dark colors that hide wear and usage are typically the better investment.

Update Appliances

If appliances are old enough to need frequent repairs, save the maintenance fees (and renter irritation). Invest in new appliances, and look for warranties that will keep repair costs down.

Match appliances whenever possible. Mismatched appliance do not add value to your property and are less appealing to renters.

Repaint

A fresh coat of paint makes the property look clean and inviting. It’s cost effective and easily masks any sign of wear in the walls or old stains.

Choose the Right Colors

The classic paint color for rental properties is greige—a warm mix of gray and beige. it is a safe color and gives residents room to personalize their space. It’s also not as harsh as a clean white or as likely to show stains.

There are enough variations in greige to find the one that suites your property. Compare shades like Almond Wisp to Greige to see the range of tones that exist in neutral interior paint options.

Add neutral accent colors, especially in kitchens and bath. These help properties stand out from competitors using the same shades of off-white.

Look for Simple Fixes

Simple upgrades dress up your property. Scratched floors, dated countertops and damaged cabinetry are great renovation targets, and they are perfect places to find budget-friendly fixes.

• Touch up scratched cabinetry without sanding or stripping
• Refinish aging wood and laminate floors with oils, waxes or stains to hide imperfections
• Polish old door and cabinet hardware or fixtures to give them new life

Prioritize Preventative Maintenance

Audit your property, and plan for repairs within your budget. Keeping up with maintenance appeals to residents and saves you the burden of emergency maintenance costs.

Preventative Maintenance

• Check plumbing and fixtures for leaks
• Survey for water damage
• Test smoke and carbon monoxide detectors
• Secure doors and windows and inspect the locks
• Test the HVAC system, compressor and air handler
• Check the foundation for fractures, sinking or upheaval
• Inspect bathrooms for mildew and grout and tile damage
• Check the roof for wear, missing shingles and soft spots

Maximize Curb Appeal

First impressions matter. Make the most of them by adding lights and potted plants to walkways. A little goes a long way towards increasing your appeal and showing the property is well-maintained.

Keys to Sharpen Curb Appeal

• Keep it clean
• Paint the house, mailbox and shutters
• Pressure wash regularly
• Add plants in flowerbeds or in pots
• Light the walkways
• Hide garbage and recycling bins

Choose Lasting Materials

Consider the total lifespan of your investments when choosing flooring, countertops, shutters and other renovation targets. Select quality, durable materials that will resist wear and tear. These materials are often not the low-budget option, but they provide the best value over time. You will save more when you do not have to make costly repairs between renters.

Watch for Sales

Plan for your renovation ahead of time and make lists of what you will need. Watch for sales with your renovation goals in mind. Whether you need new appliances, flooring, light fixtures or other upgrades, you will find sales on homedepot.com. Check the Special Buy of the Day or Special Buy of the Week.

If you qualify for a Home Depot Pro account, you will also find competitive pricing on bulk purchases and pro-exclusive deals.

Be Creative

Rental competition is at a 50-year high. Stand out from your neighborhood with unique features like smart home hubs, but avoid buying into temporary trends and overinvestments.

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