Most landlords continually seek out ways to maximize profits, as well as make life easier when dealing with their investment properties. These two goals can be achieved by making smart and affordable rental property upgrades when needed.
The question is, which upgrades are worth investing in? When answering this question, you have to take a few things into consideration – What’s best for you as a landlord, what will make your tenants happy, which upgrades can raise your monthly rental income, as well as what will increase your property value? Let’s dive into this post to discover the answer to these questions, as well as go over ten rental property upgrades that every landlord will want to consider.
Landlord-Friendly Property Upgrades that will Increase Rental Income and Make Life Easier
As a landlord who wants to attract high-quality renters and minimize repairs down the road so that everything is streamlined, cost-effective, and profitable, it’s important to put upgrades in place that make the most sense. For instance, some landlords will invest in expensive upgrades such as granite countertops in a neighborhood that doesn’t allow for raising the rent to recover the costs of such an upgrade.
The bottom line is, if you have two identical houses in the same neighborhood – one has beautiful expensive granite countertops, the other has beautiful imitation granite, they will most likely pull in the same amount of rent because you can only charge so much in particular neighborhoods. This is why taking everything into consideration and weighing all your options first before moving forward with a rental upgrade is the wise thing to do. With this in mind, let’s go over a few rental upgrade options that are worth looking into:
1. Upgrade from Carpet to Durable Flooring to Increase the Value of Your Rental
If you’re looking for a surefire way to make your life easier as a landlord and increase the value of your real estate investment, then switching from carpet to durable flooring will do the trick. Let’s go over a few discussion points so you can see why this rental upgrade recommendation is on our top ten list:
Carpet vs Wood Flooring – Which One is a Smart Upgrade for Landlords?
Carpet: A nice plush carpet can add a comfortable element to a room, but its downfalls seem to outweigh its advantages. For example, a carpet can stain easily. Just walking into the house with muddy shoes can require the carpet to be cleaned. If liquids such as red wine are spilled, especially on a neutral-colored rug, it’s over! If there are pets in the house, occasional accidents can occur and then soak into the carpet and its padding, not to mention that some cats like to tear up the corners of the carpet! These things and more are why a carpet typically needs to be replaced after each tenant leaves, and that’s a big hassle and expensive when you do this often.
Durable Wood Flooring: Ok, now imagine a wood floor. Any dirt that is tracked in the house is simply wiped up. If wine is spilled, no problem, it can be cleaned with a mop. Wooden floors don’t soak up anything, hold an odor, or get pulled up by a pet. Life sounds so much easier now, doesn’t it?
Although it can be expensive to install hardwood flooring, in the long run, changing out a carpet every few years may end up being even more expensive. Additionally, keeping carpet in lower traffic areas such as a bedroom is a common practice, and can keep the hardwood floor installation pricing down.
Easy Laminate Flooring – A Less Expensive Alternative to Real Wood Floors
A lot of times, a neighborhood’s rental market just doesn’t justify spending the type of money it takes to upgrade to a real wood floor. So, if you want a flooring alternative that’s practical and cost-effective, then laminate flooring is the best path to take.
You can purchase laminate flooring that looks just like wood, but without some of the downfalls of real wood flooring. Although it has more advantages than carpeting, real wood flooring is typically pricey, vulnerable to scratches and dents, can be damaged by moisture, and is not easy to replace. In contrast, laminate floors are less expensive, practically scratch-proof, normally resistant to moisture damage, and easy to repair sections, if needed. It’s a great flooring option that many landlords utilize when upgrading their rental property.
Floor Heating – Is it Easy or Hard to Include as an Upgrade?
If you’re thinking about adding floor heating to your rental property remodel or upgrade, you will want to think about the cost and time involved. A non-heated floor is perfectly fine and what most homes have, but some landlords install heated floors for its distinct advantages. This would include being energy-efficient and the fact that it makes a rental more comfortable.
If you know what you’re doing, or hire someone who does, heating flooring can be installed without it being too complicated. Of course, it does take a lot more time, but in the end, it will be worth all the extra steps you took to take your flooring one step above the norm. Heated flooring will certainly add value to your rental property and possibly allow you to raise your monthly rent.
2. Painting a Rental Property Can Generate a High Return on Investment
If you’re looking for an easy rental property upgrade that will make it a snap to get a tenant in place, then grab a paintbrush. A good paint job can transform a shabby property into a must-have rental! It’s best to use neutral colors. We have found that painting the walls gray with white trim looks fantastic. Or, you can’t go wrong with all beige walls. Once you find a color that works well, we suggest sticking with it for all your rentals, and registering the paint brand and color at your local shop so that your contractors can easily pick it up, and there are no color mix-ups.
3. Reduce Costs for You or Your Tenants by Upgrading to Energy-Star Certified Appliances
As a landlord, even if you don’t pay your rental’s electric bill, upgrading to include Energy-Star certified appliances can reduce your tenant’s energy bills without sacrificing appliance performance. We all know that because of the weather, some areas have higher electric bills than others. Your tenant not paying a huge energy bill can certainly make paying rent a lot easier, and it’s good for the environment too. Appliances that you should consider include a dishwasher, washer and dryer, and the like.
Your tenants can save hundreds of dollars annually just by having Energy-Star certified appliances in the house. An appliance will qualify as Energy-Star certified if it meets strict energy efficiency standards provided by the EPA and the US Department of Energy. Make sure the appliance you purchase has the blue Energy-Star logo. In addition to this, you will have less maintenance issues when you replace your older appliances.
Find out if you can receive some type of tax break when using energy-efficient appliances like these, as well as what other upgrades can reduce your taxes, by contacting a professional tax advisor. We use Tom Wheelwright of Wealthability. He’s the personal tax consultant of real estate genius, Robert Kiyosaki. Or, if you would rather read his book Tax-Free Wealth, it’s jam-packed with tax advice.
4. Improve Your Rental Property with Incredible Landscaping Upgrades
Proper landscaping upgrades can really increase your rental property’s appeal, as well as worth. Let’s take a look at a few ideas you can utilize:
Save Money and Time by Upgrading to an Xeriscape Outdoor Area
Some people are content to garden all weekend long, but many tenants choose to rent because they lack the time or the interest to maintain landscaping. Take the burden off tenants by xeriscaping your front and back lawns. Xeriscaping involves using native plants that are naturally drought-resistant and require little in terms of care.
If your property lies in a location lacking adequate rainfall, consider landscaping with natural stone and succulent plants. Or, if your rental rests in an area of heavier deluges, plant some ivy on slopes to help prevent water damage and remove the responsibility of cutting grass. While you may need to invest a bit of money upfront to redo your lawn, it proves far less costly than hiring a weekly or biweekly landscaping service. In some counties, landlords can receive a rebate for replacing water-inefficient grass with drought-tolerant landscaping.
Install a Sprinkler System to Maintain Your Rental Property Lawn
If you’re not into the look of an xeriscape outdoor area, but want to ensure your front and backyard are well taken care of, we suggest updating your rental property with a sprinkler system. Another alternative is to ask your tenant to water the lawn every week. If this isn’t an option, you would have to hire a gardener, or stop by the rental to water the lawn yourself. The bottom line is that a tenant may not be interested in watering the lawn, a gardener can be expensive, and you may not have the time to stand around watering lawns. A sprinkler system is looking pretty good right now, isn’t it?
Sprinkler system prices can vary based on the lawn size, as well as the brand. A system for a typical lawn size will run you around $2,000 to $6,000. This price is normally lower when you install the system yourself.
Update with Potted Greenery for Great Curb Appeal
Make your front yard, porch, or backyard pop with beautiful potted greenery or flowers. This will give your potential tenant a wonderful first impression, and a charming place to live. Exterior upgrades such as this are inexpensive but can have a big impact, and tenants love this type of decorative touch.
5. Save Money as a Landlord by Installing Low-Flow Water Features
Did you know that if you have a family of four in your rental property, you could save up to 20,000 gallons of water each year by installing low-flow toilets? You can also multiply these savings by installing low-flow shower heads and faucets. If your faucet is on the old side, it’s best to upgrade soon because leaky faucets not only cause water loss, but they also create unsightly rust stains and even mold. The latter can cause physical illness, especially if your tenant has a compromised immune system.
6. Increase Your Rental’s Energy Efficiency by Upgrading to New Windows
One property upgrade that can make your rental more energy-efficient, as well as increase its aesthetic appeal, is to replace your old windows. Old or poor-quality windows can, without a doubt, cause higher utility bills for you or your tenants. For example, during the winter, bad windows will allow cold drafts to come in, and heat loss commonly occurs through windows, so this can directly affect the indoor temperature. This, in turn, creates a need to run the heater more frequently, resulting in a much higher utility bill. The same goes for the Summer months in regards to keeping things cool inside. In addition to this, if you opt for double-pane windows, your tenants will love you because it not only keeps the house better insulated, but also greatly helps shield the home from outside noise.
It’s important to ensure the timing is right when swapping out your windows so you are not spending money on something that’s not needed. Here are a few signs that it’s time to upgrade:
- Your windows just look shabby and replacing them will increase the overall appeal of the rental property.
- A draft is felt near the windows.
- It’s not as easy to open and close the windows.
- You find water leaks when it’s raining.
New windows, especially if they are double-pane, are a great selling point to present to a potential renter, and can possibly afford you a rent bump.
7. Increase Your ROI by Renovating Your Rental Property’s Kitchen Cabinets
For those tenants who love to spend time in the kitchen, they will certainly notice the look of your cabinets. Not-so-great, old, or cheap-looking cabinets can turn some tenants away, so upgrading your rental with new cabinets is an improvement that can increase its value. To make it an affordable upgrade, speak with your contractors because they can often get good deals from local wholesalers on cabinets. Also, if you have old cabinets in place made of solid wood, you can actually just refinish them and replace the furnishings.
Cabinets can be expensive, as well as most upgrades, so you should ensure you maximize your efforts to lower your tax burden by incorporating. Why is this important? Because you will be eligible for many tax breaks that you would not be eligible for otherwise. We recommend contacting Corporate Direct LLC to assist you in incorporating – from determining the correct entity type for your rental business, to taking into account your state laws, to filing the paperwork, Corporate Direct will take care of it for you.
8. Attract Tenants with Eye-Catching Countertop Upgrades
When thinking about adding eye-catching or beautiful kitchen countertops, granite is usually the first thing that comes to mind. However, as I touched on earlier, while granite is a wonderful choice to upgrade your rental property with, because of its high cost, it’s best to only go down that path if the neighborhood can justify it.
You can attract tenants and even bump your rent up with Formica laminate countertops that appear to be granite. It’s much less expensive and can give your kitchen an overall appearance boost. Upgrading your old countertops with new Formica countertops can give you a break from even having to think about the countertops for the next 10 to 20 years. Formica countertops are long-lasting, durable, heat resistant, and look great.
9. Upgrade the Bathroom Vanity to Improve the Look of Your Rental
A smart and simple upgrade you can apply would be to replace your old bathroom vanity with a new one. A bathroom vanity generally consists of a mirror, sink, countertop, and typically room for storage below the sink. You can dramatically change the look of your bathroom with a new vanity. There are many styles, sizes, and colors to choose from to match the overall look of your rental.
10. Landlords Can Brighten Up Their Rental with Beautiful Lighting
If you want to make it easier for you to rent out your property, try upgrading your lighting throughout the house. Proper lighting can make an excellent first impression on a potential renter, and it can enable you to turn a dim and depressing rental into a bright, happy, and beautiful living space. Additionally, you can add lighting to the backyard. This can be a selling point for those who like to entertain. Also, lighting is pretty inexpensive compared to most property upgrades.
It’s up to you as the landlord to decide what type of lighting you would like to install. There are a few basic forms of lighting to consider when it comes to upgrading your rental property – let’s take a look:
- Ambient Lighting: This is what you would call your main, or general lighting. It creates an overall illumination of the room. There are many avenues to set up your ambient lighting, this can include ceiling-mounted lights, wall sconces, and the like.
- Accent Lighting: This is for highlighting or accenting certain areas of the home. They are typically set up in areas where artwork may hang, or even outdoors to highlight a beautiful area of the front or backyard. You can use adjustable track lighting, or single spotlights to achieve this type of lighting.
- Task Lighting: It’s as the name suggests; it’s lighting used to help illuminate an area where a task may be completed. For instance, kitchens may have lighting that shines directly on a portion of a countertop, or the area above a bathroom vanity.
Here are a few lighting extras to consider:
- Upgrade with Dimmers: This lighting feature provides your tenants with control over the lighting – dim mood lighting, or maybe a bright light for reading, and so on. Dimmers are fairly easy to install, but if you’re not familiar with electrical work, simply call an electrician.
- Utilize Energy-Efficient Lighting: Everything seems to be going green these days, so why not add this feature to your lighting choices? Energy-efficient lights such as LED bulbs end up using about 80% less energy than common incandescent bulbs.
Power Resources for Investors
Be sure to look over our power resources that can increase your investor IQ and fast-track your portfolio growth:
Also, here are a few items that will provide you with some useful tips for your investment journey:
- How to Wisely Budget Your Kitchen Renovation
- Understanding Property Management Fees
- Finding the Right CPA for Real Estate Investors
- How to Use a VA Loan for Investment Property Purchases
Making Rental Property Upgrades that Improve a Landlord’s Experience and Increase ROI
As you can see, there are quite a few rental property upgrades that you can benefit from. Upgrades such as these present an opportunity to attract higher-paying tenants, produce a reliable ROI, minimize repairs, and just make your life easier overall. If you would like to speak to someone regarding more property upgrade ideas, or if you’re interested in acquiring a new construction rental property where upgrades are not needed, just schedule a call with Morris Invest – we would love to speak to you.
If you don’t want to worry about upgrading your rental for many years to come, then dive into the following video that details one of our new construction properties:
