Deciding to renovate your investment property can be a daunting task, with multiple factors to consider. They range from choosing what improvements will offer the greatest return to choosing a reliable contractor. It’s possible to add value to your project in many different ways, including DIY and cost-effective projects to larger-scale remodeling. When done properly, both will ensure the time and money you invest will be recouped.
Not every project offers the same returns, however. So, when choosing how you want to invest your resources be sure to consider all the factors. The good news is the less you spend, the higher the return. Some of the best home improvement projects have a smaller cost upfront but yield a high return on investment. For example, adding a garage to a home estimates a 63.7% return on your investment. Adding a garage door nets a 75.7% return. Do plenty of research before choosing a project, so that it pays off for you in the long run. Consider staying away from a high end, gourmet kitchen remodel. Instead, focus on improving the overall appearance of your home with projects that offer a higher return on investment such as new energy star appliances, fresh paint, and new hardware.
Anything that adds more value to your home can greatly increase your rental income as well. One of the many benefits to remodeling your property — whether by adding square footage or installing a new bathroom vanity — is that you will be able to lease faster, attract higher quality tenants, and rent for a higher price. An upgraded home is also more likely to retain tenants and decrease the chance of vacancy.
Choose Remodeling Projects With The Highest Return On Investment
The first step is to determine the return on your projects. The Cost vs. Value report, released every year by the website Remodeling, estimates the average cost of remodeling projects and how much value the project will add to your home. The site bases its data on average prices of similar projects in your region. While it may not be exact, it is a great tool to help you decide which jobs to focus on when the time comes to invest in your property.
Apply Fresh Paint
Repainting the interior of your property yields the highest return of any rehab project. First impressions sway new renters, and there is no better way to capture the attention of a potential tenant than by presenting a clean and cared for home. According to the website HomeAdvisor, painting costs $2 to $6 per square foot with most jobs averaging $3.50 per square foot. Painting is also a great project for homeowners to take on themselves. With a few dollars of paint and a little bit of time, your property will be market-ready, and your investment safely returned.
Replace Carpet with Wood or Laminate Flooring
One of the first things potential tenants and buyers notice in a home is the flooring. Carpet that is worn or stained, will lead people to wonder what else is neglected in the home. By contrast, presenting a desirable first impression will guarantee a higher price and decrease the turnaround time between renters.
It’s also important to consider that multiple renters will occupy your investment property over time. As a result, there’s a long-term benefit to installing durable wood or laminate flooring compared with the cost of replacing worn carpeting on an average of once every five years.
Wood and laminate flooring will cost more upfront yet will yield one of the highest returns on investment of any home improvement project. Adding hardwood or laminate flooring to your property will increase the value by up to 2.5%.
Make Smart Bathroom Upgrades
It doesn’t take much to turn an existing bathroom into a more visually appealing space. Sometimes just a new coat of paint, fresh caulk around the bathtub and shower, and upgraded hardware can make all the difference. Don’t hesitate to go beyond that and install a new vanity, classy sink, beadboard, and tile. An updated bathroom will catch the attention of any renter and makes a huge impact on the overall impression of the property.
If your home only has one bathroom, adding a second washroom will make your property much more attractive to renters and also increase its value when you decide to sell. If your budget does not allow for a full bath addition, consider a two-piece powder room. This generally requires only about 18 square feet to build out. A bathroom remodel typically returns 80%-130% of the expense.
Kitchen remodeling is at the top of the list as far as increasing your home’s value. However, this does not necessarily mean you will make back every dollar you spend. You can plan to recoup 60%-88% of your investment on a kitchen remodel. When choosing the amount you want to invest in upgrading your kitchen, consider the price point of local properties in the same range as yours. Then choose your projects to keep your property value in line with the competition.
A high-end kitchen remodel with state of the art appliances, and designer tile will not improve the value of a mid-range market home. A well-appointed kitchen creates an inviting setting where much of the social action of a home takes place. However, you can still accomplish this without spending money on an expensive kitchen remodel. Keep with neutral touches such as white subway tile for a backsplash, a mid-priced sink and faucet, new cabinet hardware, new countertops, and new appliances. These cost-effective upgrades will offer you much more return on investment while keeping your house at the lead of a competitive market.
How Rent Portland Homes by Darla Andrew Can Help
With Rent Portland Homes by Darla Andrew managing your rental property you can rest assured that the effort put into home upgrades will be well maintained. In addition to 24/7 on-call emergency maintenance services, we also provide routine property inspections. Potential renters are thoroughly screened by our management team and we also handle the paperwork involved with every step of the application and lease agreement process. Contact Darla Andrews today to learn more.