Some improvements that you make to your home will pay you back in terms of the tenants they attract or the homebuyers they entice.
These can be things you’d have to do irrespective of your plans for the home, or they may be examples of going the extra mile while knowing the journey will end in a greater reward.
Whatever you decide, make sure your investments are guided by due diligence and fit into a larger investment strategy.
Considerations Before Doing Home Improvements
There are several factors to consider when deciding which renovations to make beyond how likely you are to make back your money.
- There are seven common investment strategies that you need to know. You should know which one you’re using before investing.
- Know what makes a good real estate cash-on-cash return, which is the measure of how much profit your investment dollars makes you.
- Know how to calculate the cap rate, which is the measure of how long it will take you to recoup your investment.
Home Improvements That Will Add Value to Your Rental
1. Install a New Roof
According to HGTV, a new roof can bring a return of upwards of 80%! And for a good reason: not only can a properly maintained roof last upwards of two decades, but it also adds value to your home while providing peace of mind to prospective buyers. After all, it saves them the hassle of having to replace the roof themselves. Additionally, a home in need of a significant repair provides leverage that a buyer can use to argue down the price.
Your home’s roof is one of the first things a potential buyer may see, and a first impression is a big deal. If a buyer sees mold or blown off shingles, it will color their experience of the rest of the home. Additionally, a potential buyer may enjoy remodeling the interior to fit their unique specifications, but a roof is less likely to vary from person to person because it’s a functional feature.
You’ll want your gutters to be clean as well, and repaired if need be.
Finally, the last thing you want when selling your home is for the home to get damaged during the process because you have a roof in need of repair.
2. Garage Door Replacement
A new garage door improves curb appeal and is a renovation that easily recoups its cost.
3. Loose Fill Attic Insulation
If your attic doesn’t already have insulation, you could be losing money on heating and cooling bills and compromising your ability to use your attic for storage. By far, insulating your attic is one of the most affordable and most comfortable ways to increase your home’s value.
4. A New Front Door
Whether it’s steel or fiberglass, a new front door improves curb appeal and easily recoups its cost. Although, refinishing or repainting may suffice if your door is in good shape.
5. Add a Deck, Patio, or Porch
Outdoor space is a significant motivating factor for many prospective homeowners or renters, and decks, porches, and patios covered or uncovered provide great usability. These options enhance the home, create an opportunity for hosting, and help make the outdoors even more enjoyable. These additions often pay for themselves in the long run.
6. Install a New HVAC
Like a new roof, installing a new HVAC system adds considerable value to your home. A properly maintained HVAC can last at least ten years. It also improves the experience of touring your home for prospective buyers or renters since it determines the space’s temperature and air quality.
Make sure your HVAC is compatible with smart thermostats as well. They’re an inexpensive investment with significant returns thanks to their usefulness. Plus, given that smart thermostats are becoming standard-issue, not having one makes you and your home look out of touch.
7. Remodel the Bathroom
Given that bathrooms tend to be smaller than other rooms, they’re a great investment when it comes to remodeling because they require less labor and materials to upgrade. New tile, backsplash, fixtures, showerheads, and sinks go a long way to impressing prospective buyers and renters. You’re likely to make back roughly 75% of your investment.
8. Install New Siding or Manufactured Stone Veneer
Like an old roof, old or dirty siding will immediately impact how visitors feel about your home. So, either upgrade your siding to vinyl or fiber-cement or make sure your siding is clean before you start giving tours. A new coat of paint might just do the trick.
Additionally, consider manufactured stone veneer as an option for adding curb appeal.
9. A Minor Kitchen Renovation
If you decide to reno your kitchen, keep it minor rather than major. It’s easier to recoup the cost on a kitchen that costs $20,000 than one that costs $60,000.
10. Request New HOA Policies
There are at least 21 rental property updates you can make to attract high-quality residents if you live in a homeowners association (HOA). Many of these changes entail pushing for uniformity and cleanliness in your community to improve curb appeal.
- Reduce the number of cars on the street.
- Suggest a no-flag policy.
- Bring up theme ideas for home facades and decorations.
11. Landscaping & Irrigation
Landscaping can be a low-cost way of improving curb appeal. It’s also an essential part of fire prevention. For example, you’ll want to keep the grass under four inches in height within a 100-foot perimeter of your property and make sure there’s no dry brush close to your home. Additionally, perform seasonal maintenance, such as regular fall maintenance, so the property looks its best.
Mulching and woodchips can considerably improve your lawn. As would an upgraded sprinkler system. Alternatively, you could replace your lawn with something else. Consider:
- A rock lawn.
- Additional parking.
- Storage units.
- A porch, deck, or patio.
- Tennis or basketball courts.
- A fire pit.
- Storage units.
In addition to making sure you have clean or new siding, you should pressure wash your driveway, steps, fence, and anything else on your property that could be cleaner.
13. Repaving Driveway and Fixing Potholes
Petition your HOA or local government to repave the roads in your neighborhood and fix any potholes. The last thing you want is for the ride to your home to be unpleasant, especially if it shakes the whole car or leads to a noticeable bump on the head.
Improved outdoor lighting is an affordable way to enhance curb appeal. Consider an illuminated walkway. Lights above your door will make your home feel more welcome. Meanwhile, indoors, install smart bulbs so that residents can control the lights remotely.
15. New Appliances
New appliances can add considerable value to your home and are particularly appealing to first time buyers or renters. A dishwasher and washer/dryer goes a long way as far as added convenience goes.
Keep up with the latest design trends, however, as they change from year to year. Stainless steel, for example, is less popular than it once was. Instead, colored appliances are in greater demand. Simultaneously, minimalist kitchen design is now more in favor, which means that irrespective of their color, appliances are being kept behind doors or cabinets in favor of smoother surfaces and finer lines.
16. No More Carpet
Getting rid of carpet is one of the tips for easy rental tenant turnover management because other forms of flooring are so much easier to maintain. Some carpet alternatives include luxury vinyl tile (LVT), ceramic tile, wood, some kind of snap together flooring, etc. Non-carpet flooring is an easy way to make your home feel like an upgrade!
17. New Paint and Window Treatments
Light or warm colors will make your home feel more like home, while improved window treatments can add more light. If you decide to get new windows, make sure they’re energy-efficient!
18. Add an Accessory Dwelling Unit
An accessory dwelling unit (ADU) is an additional structure built on a property that already has a central unit.
An ADU can be a:
- Garage conversion
- Stand-alone unit
- Attic conversion
- Basement conversion
- Attached to the main property
Whatever form an ADU takes, it has everything a tenant may need:
- A separate, private entrance
- A kitchen
- A bathroom
- A living space
As you might expect, an ADU can be a costly investment, but they’re also a good investment:
- ADUs increase your property’s value
- Are a potential stream of passive income
- Can provide housing for family members or guests
19. Other Ways to Add Value to Your Rental
Discover other ways to add value to your rental property that requires spending little to no money:
- Building a positive relationship with tenants.
- Gestures to show tenant appreciation and increase lease renewals.
- Tips and tricks to get your renters to renew their lease
Bottom Line on Adding Value to Your Rental
There are many types of home improvements you can make that will add value to your rental.
However, before making your improvements, you need to know your investment strategy to determine whether or not it makes sense to make the improvements you have in mind.
Additionally, beyond improving your property, there are things you can do for potential tenants that cost little to no money that in and of themselves will add tremendous value to your rental.
Do your due diligence and be guided by solid research.