When you’re looking to earn more money on your rental properties in Golden, Colorado or elsewhere, you need to ask yourself this question: What are tenants willing to pay for that my home does not already provide? The renovations you make in response to that question will allow you to earn more rent.
You also have to think about your long term ROI. What kind of value does your property hold, and how much extra value can you establish if you’re willing to make a few improvements and upgrades?
Renovations are a big part of every smart investment strategy. We’ve put together a list of the top 5 investment property renovations that will create value and drive up ROI. But first, we want to make sure you understand the importance of renovating your property.
Why Renovate Your Golden Investment Property
Making rental property renovations is important in terms of value and tenant placement. A well-maintained rental property always performs better, regardless of the market’s strength. You’ll find better tenants and earn more money.
There are several benefits to keeping your property upgraded and updated.
- A Colorado rental property that has been recently renovated will earn more rent and attract higher quality tenants. These things are good on their own, but you also have to remember the big picture: you’re reducing your vacancy and turnover costs. To rent a home quickly for the most amount of money and to the most qualified tenants, you need a well-maintained home that’s modern and appealing.
- When it comes to establishing your rental value, upgrades make sense. You can earn more on a home with new flooring than on one with old carpet. You can also attract better tenants with energy-efficient, stainless appliances than you can with those outdated refrigerators and dishwashers from decades ago.
- Increase your ROI with regular improvements and upgrades. Renovations make sense for your current rental income. They also make sense for long-term ROI. At some point in the future, you’ll want to sell your home. Whether you’re planning to do that in five years or 25 years, keeping your property up to date with design trends and finishes will drive up the ultimate sales price of your home. That’s going to help you earn more.
- Upgrades can be cost-effective. We think renovations and improvements are important, but that doesn’t mean you have to tear down the house and start from scratch. Investing $50,000 for an extra $50 in rent per month doesn’t make much sense. Be smart when you’re renovating your property. Choose upgrades and updates that don’t cost a lot but will reap a lot of rewards.
- Renovations contribute to your preventative maintenance goals. Preventative maintenance needs to be a big part of your plans for protecting the condition of your home. You don’t want to let small problems turn into expensive repairs. When you’re constantly looking for ways to improve your rental property, preventative maintenance will come naturally. You’ll notice what needs to be fixed and plan for future repairs so there are fewer emergencies and surprise costs. Always remember maintenance means to maintain. Don’t wait until it is a big problem.
So, where should you invest those renovation dollars?
Here’s our Top 5 list:
1. Wall Condition and the Importance of Fresh Paint
Start with the walls. If your rental property still has wood paneling or mirrors from the 1970s, it’s time to remove it. While it might have a vintage vibe that certain tenants will appreciate, most renters will find it dated and unappealing. You want your walls to look sturdy, clean, and modern. They should be well-insulated and painted in neutral colors.
Paint is not something that many owners think about as a renovation, but it’s a cost-effective improvement that will absolutely improve the value of your property. Paint the walls completely during every turnover, and if you’ve had the same tenants in place for years and the walls are looking worn and faded – it’s definitely time for some improvements.
Painting your entire home might come with a higher price tag than you’d like to pay, and if you can’t do the whole house, upgrade the paint in a few key areas. Put calming colors such as gray shades or even traditional whites and cream colors in the bedrooms and the living area.
Remember that there’s more to painting than the walls. A fresh coat of paint on your baseboards and door frames will make the rental home appear refreshed and clean. You could whitewash a brick fireplace or put new paint on the ceilings if they’re looking dingy or stained.
2. Think Hard Surface Flooring in Living Rooms
Carpet has generally been the go-to flooring surface for rental homes. Several inexpensive carpet grades are available to owners, and they’re easy enough to install and clean between tenants. However, if you want to make a valuable upgrade to your Golden rental property, consider providing better floors. Install a better carpet grade in the bedrooms. Don’t keep cleaning it when it clearly needs to be replaced. You’ll want carpet that’s fresh and free of stains and tears.
If you’re looking to earn more rent in the short term and higher ROI in the long term, consider installing hard surface flooring, especially in common areas like the living room, den, home office, dining area, foyer, and open spaces.
Hardwood floors would be great, but they’re also pricey. Luxury Vinyl Tile looks great. These floors will increase your earnings because they’re cleaner and easier for tenants to maintain. You’ll also have a longer lifespan, which means you won’t be cleaning and replacing carpet every year.
3. Take a Look at Your Lighting
Lighting plays a role in establishing a welcoming and attractive rental property. Tenants will notice what the interior lights and exterior lights look like, and that will impact what you can charge in rent.
When you decide to make some lighting upgrades, thing about energy efficiency. Choose light bulbs that are greener and likely to keep energy costs down. Tenants will appreciate this, and you’ll save money when you’re paying for utilities during turnovers and other periods.
Start with the exterior lighting, and make sure there’s enough of it. Your residents want to feel safe at night, and you’ll want to be sure exterior doors, walkways, and parking areas are well-let and easy to see from the street or inside the property. Motion lights are popular, and can help tenants feel more secure. Plenty of apps and smart home technology tools are also available to set automatic lights and dimmers.
Inside the home, you’re going to want bright and modern lighting, especially in the kitchen and the bathrooms. Ceiling fans are popular, especially in bedrooms and living rooms. Take a good look at your lighting and make upgrades wherever you can. It doesn’t have to be expensive, and it will make your home look good. Even those lights in the bathroom over the sink can be made simpler and more appealing to tenants. You don’t want those enormous brassy bulbs that you might not have thought about for years.
4. Landscaping and Curb Appeal for Golden Rental Homes
To provide a welcoming and inviting atmosphere at your rental property, you’re going to need landscaping that looks clean and easy to maintain. Whether you’re renting out a single-family home or a condo, townhouse, or unit in a multi-family building, you want the outside of your property to look great. When tenants see a pretty exterior, they can really get excited about living there. This type of curb appeal can also translate to higher rents and better home values.
Mow the lawn and trim the trees and weed the flower beds. Make sure there aren’t any branches dangerously close to the roof or the windows. If it’s winter, keep the snow and ice shoveled.
Investing in a sprinkler will help keep the grass well maintained, most tenants are horrible about watering the grass.
Investing in things like fresh paint on the front door, power washing outside the home, and even details like a new mailbox, bright flowers, and a welcoming doormat will not cost a lot and will deliver big returns.
5. Renovate the Kitchen and Its Appliances
Kitchens are perhaps the most important rooms in the house, especially when it comes to how your property is valued. You don’t want faded cabinets and drawers that stick. If you’re going to focus your renovations on one particular place, choose the kitchen. Upgraded faucets and hardware will make a big difference. Neutral cabinets are attractive and energy-efficient appliances that match each other are a great idea. The cost of stainless steel appliances has gone down and makes places look so much better.
Consider a backsplash against the kitchen wall, near the stove or sink. It looks modern, tasteful, and expensive – even if it’s not. You don’t have to use marble tiles, but something like plain white tiles or glass will not only improve the look of your kitchen – it will also protect your walls.
These are the best renovations we can recommend for your property. We’d be happy to give you a more personalized list of recommendations, based on your own rental home. For some more advice on this topic, please contact us at Laurel Property Services, Inc. In addition to providing property management in Golden, we also serve Wheatridge, Morrison, Lakewood, Arvada, and Genesee, CO.