Any landlord has to consider a few vital things when they start letting out their property. What renovations can they do to their property to make it look better? Which home improvements will lead to the biggest return on investment? And how can I avoid investing money in pricey projects that won’t give me a return on your investment? To help you answer these questions, we’ve highlighted a list of the best and worst home renovations you could do to your property.
The Best Renovations:
- Kitchen Remodelling
Renovating a kitchen tends to involve a lot of usability upgrades, which buyers love. This is commonly considered the single best project to increase rental value, and further well-thought-out remodelling projects will add to the overall value of your property.
- New Fireplace
Installing a new fireplace can quickly increase the rental value of your property, particularly if it’s an upgrade from an older, less efficient wood stove to a gas or electric stove. Even renovations for appearance and safety can make a big difference in colder climates where fireplaces see a lot of use.
- New Front Door
One of the newest trends for updating the look of your rental property is to install a new door, as this simple feature can increase the value of a property! Prospective tenants often find a new door is immediately apparent, adding to curb appeal while also allowing you to improve security through smart device features.
- Bedroom Conversion
Converting an area of the house, especially an attic or basement, into another bedroom can greatly increase the value of a property. This is because it adds more square footage, creates a new universally usable room and opens the house up to buyers with larger families, expanding your list of potential tenants tenfold.
- Attic Insulation
An attic insulated with fiberglass can recoup its cost in no time at all! This renovation means you are technically gaining rental value at no expense when adding important attic insulation. Make sure all gaps are covered and cracks are sealed against pests and weather damage.
- New Garage Door
When renting out a house, your front-facing garage doors can impact curb appeal more than most home components, leading to a significant return on investment. Upgrade to a better garage door with windows and smart control features to really impress potential buyers and add additional security to the property.
- Stone Veneers
As noted in a few of the suggestions above, maintaining the outside aesthetic of your rental property is paramount to attracting clients. A veneer of stone to your sidings or stone-like wall patterns to various walls inside and outside your house can drastically change the appearance of your home at relatively little cost.
The Worst Renovations:
- Backup Generator
A generator may be useful as a safeguard against power outages but it doesn’t add a lot of everyday rental value to a property, nor attract new clients. Exceptions occur in rural or off-grid homes where generators see a lot of use in bad weather, otherwise it would be best to steer clear of this project.
- Backyard Patio
The patio is a great DIY project, but it commonly does not recover more than half of the cost as added value to your house. This is because patios are not especially visible and are not commonly considered the highlight of the home. However, a full upgrade will be more impressive than just a layer of stone.
- Bathroom Addition
When considering a bathroom addition, it’s important to ask “does the house need a new bathroom, based on the number of bedrooms?” A bathroom involves expensive renovation, with plumbing playing a big role in the cost of the project. While bathroom remodels see better returns on investment, building an entirely new bathroom is a project that is best avoided unless absolutely necessary.
- Master Bedroom Addition
An expanded master bedroom can be an expensive project, and today’s tenants do not really care about making master bedrooms larger. Furthermore, as a rule, only plan a master bedroom addition if you want it and you’re planning on staying in the property yourself for years to come.
A full sunroom needs careful design, proper insulation and a lot of maintenance. And potential clients may end up seeing it as a superfluous feature and unnecessary. If your property has the space for a potential sunroom, consider a gazebo or screened porch to increase the rental value instead.
- Home Office Renovation
Home offices are great if you regularly use them and a renovation may be important for your personal day-to-day work. However, your prospective clients may not feel the same way. Additionally, these renovations don’t contribute much to the property’s market value.
- Garage Addition
While a garage door has a big impact on curb appeal, a bigger or more elaborate garage is harder to notice. And it has limited uses compared to other indoor renovations, which add rental value.
- Window Replacement
Window replacements can vary greatly, and some may have more impact on the rental value of your property than others. Well-planned window projects may see a high return on investment, but casual window installations aren’t expected to add much value at all. Instead, look for replacements where you can expand windows for more light or greatly improve their insulation.
While this list might give you a head start to finding the best renovations that will improve the rental value of your home, it’s always important to take into consideration the needs of your tenants and the nature of your property.
Your return on investment is important but not all home projects add much value, so always consider your investments carefully. If you would like to find out more about how Keey can help you get the most out of your rental business, contact us today!