When you’re renovating your rental property, it’s important to make the home comfortable and safe for your tenants. However, there are certain improvements that simply don’t pay off. In order to maximize your return on investment, you won’t want to waste money on elaborate upgrades.
That’s why it’s important to assess what is appropriate, based on the neighborhood. For example, in a C class neighborhood, your tenants don’t expect high quality amenities or features. More importantly, the rental amount does not change based on these improvements! All you’re doing is decreasing your ROI.
I see this all the time—a rookie investor thinks they can make more in rent and attract a higher quality tenant by making extraneous purchases, but it never works out that way. Inexperienced investors often try to over upgrade is in the kitchen, specifically the cabinets. A rental property does not need custom cabinets made out of solid wood. We always install base grade cabinets in our rentals. They’re solid, they get the job done, and they look great!
And if one of our tenants is a little rough on the cabinets, it’s no big deal. We can simply replace the cabinets for a few hundred dollars during tenant turnover. Remember, your rental properties are not luxury apartments.
In the same realm, many investors think they need the best countertops on the market. This is not the case. Your rental needs something durable and affordable. Not granite! Formica looks convincing, and lasts for years.
If you want to know exactly what we do in a renovation to make a great home for our tenants, check out this video!