In real estate, it’s all about the value. And when I say the “value” I don’t mean just the property itself, but how you can increase that value with simple renovations. Property Renovation is the process of renewing properties.
Renovating units and increasing the value of your rental property is a great way to increase your income as a property owner. This can also be an effective way to keep your tenants happy and stay ahead of the competition in terms of renting out your units.
Updating your unit’s kitchen, bathroom, and flooring is a good way to increase the value of your unit. Also try adding new paint and light fixtures. If you want to take it a step further try adding some curb appeal by adding flowers, bushes and fencing around the property.
During the current cycle, this has been the chosen business plan for many multifamily investors. It’s become so popular that it’s practically impossible to find a property in certain areas that haven’t been modified cosmetically since it was built.
As an investor, One must assess whether there is room for renovation or more. An older apartment building or multifamily property will usually be one of three things:
- Partial Renovation
- Completely Renovated
Renovating Units to Increase Value
There are many methods to tidy up a place, from little repairs like changing hardware to major initiatives like ripping down walls. Which renovations bring the most value to a property? The appearance, feel, and functionality of the kitchen and bathroom are important. Let’s start there and work our way through the other suggestions for increasing the property’s worth.
Remodeling can be a good investment, but keep in mind that there’s no assurance you’ll get your money back.
- Renovating Kitchen
The kitchen, as we’ve all heard, is the heart of the home. The same can be said for renovations. The kitchen is one of the most crucial areas for a buyer. Kitchen renovations may include new worktops, cabinets, and knobs. A simple repaint can sometimes suffice to make your kitchen appear newer.
Matching the finishes of the oven, refrigerator, dishwasher, and microwave quickly unifies the look of the kitchen. You don’t have to spend a lot of money on top-of-the-line appliances, but doing so will improve the kitchen’s operation, which is a big plus for tenants.
- Renovating Bathroom
If you have the space, upgrade the bathroom’s style by adding a new vanity and more counter space. Upcycle an old dresser by adding a sink to create a fashionable and one-of-a-kind statement piece. You may also get low-cost choices at locations like IKEA and Costco.
If you have some budget, add a full bathroom to each of the property’s bedrooms. For roommates, having a one-to-one bedroom-to-bathroom ratio is a huge plus.
- External Renovations
It contains renovation like paint, flowers, shutters, and other decorative elements. It’s giving anything that’s out of date a makeover.
Garden landscaping could add significant value to your property. if you have a front lawn. Although it is not the same as a kitchen or bathroom makeover, it is one of the most cost-effective ways to increase the value of your property. Because first impressions are so essential, make sure your yard is manicured and that you add low-maintenance plants.
- Create or renovate a home office
Consider turning an existing walk-in pantry (or closet) into a home office if you’re not much of a cook. More than 70% of purchasers looking for a home office or fitness room prefer it to be 100 square feet or larger, according to the NAHB, but in Provencher’s experience, just having that dedicated area is a plus.
I have some advice based on my years of real estate expertise and ownership of numerous properties over the past years on how to optimize the value of your home and property renovation investment while minimizing the inconveniences of project management while living in your home. Once you’ve determined why you’re considering renovations, you may weigh the pros and disadvantages of potential alterations and enhancements.
Strategies For Renovating Units
There are many ways to increase the value of your rental property. In fact, the most successful investors have a thorough plan that they put into motion every time they purchase a new property. Most investors will renovate units and increase the value of their property with each renovation.
Whether you’re an experienced investor or just starting out, here are some easy tips that will allow you to make more money from your property and ensure that your tenants are happy, too.
- Go for quality over quantity
While it is important to get as much back on your investment as possible, it is also important to ensure that your tenants are happy. If you’re spending $10,000 on an apartment for rent in New York City and you’re only going to get $50 back in rent each month, then this would be a bad investment. However, if you’re spending $10,000 and receiving $500 in rent each month then you can see how this can add up quickly.
- Be strategic with renovations
It’s important to focus on renovations that will add the highest return on your investment. New windows and appliances are much more valuable than a new paint job. By putting money into areas where it matters most, you’ll be able to maximize your return.
The following is the procedure for renovating and increasing the value of your units.
- The first step is to review your rent roll and determine which units have been occupied for more than 1 year. These are the units that you should focus on for renovations. Many tenants would not like to be displaced from their unit every year, so annual renovations may not be desirable. If you have a large number of units then you can focus on some units each year and rotate through all the units over time.
- The second step is to determine what type of renovations you would like to do in these selected units (e.g., floors, paint, kitchen cabinets). This will depend on the condition of your units, what items are outdated and a general renovation budget based on the size of your property.
- The third step is to select a contractor who can do the work at a reasonable cost. You should ask around and get quotes from different contractors before hiring them for the job. The contractor should also be able to paint, install flooring, etc., otherwise you will need multiple contractors to complete the job which can complicate things dramatically if one contractor waits on another to start his work or there are delays in getting materials
Renovations to your properties can dramatically increase their value. If all of the variables are in place to make a renovation worthwhile, you might easily recoup your renovation costs and more by increasing the value of your properties. If in doubt, run your renovation plans by a top-rated real estate professional who can tell you what’s trending in the area. Get an expert to help you determine how to best improve the property value.
Finally, well-placed investments can improve your living environment and financial destiny. If you take the time to research and plan ahead of time, you’ll discover that the time and money spent will be well worth it. Nothing beats cooking your first meal in your newly refurbished kitchen or sleeping soundly the first night after your seismic retrofit is finished. After all, the satisfaction and peace of mind that comes with the outcomes are priceless.