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 your rental:
1. DETERMINE PROPERTY VALUE. Estimate your property’s value based on the market rate in the neighborhood or use a home appraiser.
2. 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.
3. 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.
4. ASSESS THE 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.
The longer your property is being renovated, the longer you’re unable to collect rent. Get the project done quickly and reliably with a trusted contractor. If you don’t already have a preferred contractor, get a free consultation from a Home Depot service provider. Home Depot contractors are affordable, licensed, insured and carefully vetted. They’re also familiar with local safety codes and legislation.
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 the 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.
If an appliances is 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.
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.
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.
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 COLOR
The classic paint color for rental properties is greige—a warm mix of gray and beige. It’s aesthetically safe 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 #PPU5-12 Almond Wisp to #PPU24-11 Greige to see the range of tones that exist in neutral interior paint options.
Add a neutral accent color, especially in the kitchen and bath. This will help your property stand out from competitors using the same shades of off-white.
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 shows the property is well-maintained.
KEYS TO SHARPEN CURB APPEAL
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.