What to Upgrade in a Rent House Remodel
Sooner or later every owner of rental property is faced with a remodeling dilemma. When your property becomes worn or outdated, but you are not ready to sell it, how do you decide what kind of upgrades to make?
- Should I upgrade the flooring to wood laminate?
- Should I replace a broken appliance with stainless steel?
- Should I add a ceiling fan in every bedroom?
With each decision, an owner must weigh the cost of the remodeling against the amount of time it takes to recoup the expenses.
While most owners realize rental properties are classified as income-producing assets, many fail to realize the connection between remodeling and the value of the property. For a rental investor, the value of a property is the amount of rent the property produces – the more a property rents for, then the more it is worth to you as a landlord.
Therefore, remodeling projects should focus on upgrades that would induce a renter to pay more rent. Here are a few examples of things that might induce a renter to pay more rent:
- Wood or wood-laminate flooring
- Stainless steel appliances
- Double sinks in the master bath
- Extra storage space
On the other hand, here are some things that a renter would not care about paying more money for:
- A new roof (renters expect the roof not to leak)
- New air conditioning (renters expect the place to have ac)
- Fresh paint (renters expect the place to look nice when they move in)
Now we are not saying don’t replace the roof if it needs to be replaced or the ac is not working reliably. Nothing will move out a renter faster than a poorly functioning ac. However, do not expect a renter to pay more money for a property because of a new roof or new ac system. On the other hand, if you are considering upgrades in your remodeling budget, focus on things that look nice and would be considered a lifestyle upgrade by the tenant.