Whether you’re a seasoned investor or just starting out, you can look to increase rental property ROI through strategic remodeling.
Not only does a renovation or remodel increase the value of your rental property investment, it can also help you attract and retain renters more quickly, thereby increasing your cash flow.
And if your primary investment strategy is the BRRRR method (Buy, Renovate, Rent, Refinance, Repeat), then renovating rental property is simply part of the overall equation.
Let’s take a look at some areas to focus on regarding rental property renovations that will help maximize your ROI.
Kitchens
One of the most cost-effective ways an investor in rental properties can increase their ROI is by renovating an outdated kitchen.
A great kitchen starts with the basics: cabinets, appliances, countertops and flooring. Make sure these are in good condition before investing in replacements.
For the appliances, you want good quality with a good warranty, but don’t over to it with high-end.
These will rarely help increase the overall value of your rental property.
Bathrooms
As with kitchen remodels, you can increase rental property ROI by renovating an outdated bathroom.
By swapping out old fixtures with new ones, for example, you can give the bathroom a fresh look without spending too much money.
Like kitchen renovations, however, don’t overdo it with a bathroom remodel.
Be sure to invest in good quality fixtures, but shy away from high-end items, like a high-end shower/glass door unit, for example, as these types of items will not help increase your ROI.
Fresh Paint & New Flooring
Repainting the walls and either refinishing an existing floor or installing a new one are simple, cost effective ways of helping to improve the ROI of your rental property.
A fresh coat of paint can make an immense difference in how the property looks and feels. And by replacing or refinishing old or worn out floors, you can give your rental property a modern look that will help attract renters.
Be sure to invest in materials that will last and will not have to be replaced every couple of years, but don’t over do it from a cost perspective.to
Conclusion
Strategically renovating your rental property, by focusing on the kitchen, bathroom(s), and fresh paint and flooring, will help increase the ROI of your property.
And while it’s important to invest in higher quality items when considering any rental property renovation, don’t opt for high-end items, as these will not increase your rental property’s ROI.
In the end, you want to make improvements which are attractive and durable, and which will attract good tenants that actually want to live in your properties, without overdoing it from a cost perspective.
This leads to less vacancy time and higher rents, and ultimately higher cash flow in the long run.