Whether you own a single condo that you rent out or you manage several apartments, you’re invested in long-term value. After all, you want your investment to grow so that you have options if you decide to refinance or sell. Plus, for obvious reasons, you want to keep the property in its best-possible shape so that your tenants stay happy and you deal with fewer repairs.
In this article, we’ll review several of the property upgrades with the best long-term payoff, and what you should prioritize if you’re ready to invest back into your property.
Make value-boosting renovations
If you’ve managed to save some money to spend on your property, you should start with a kitchen or bathroom remodel. As explored below, these two projects carry a great return-on-investment.
Looking to renovate your investment property? Start with the kitchen. Kitchen remodels have one of the best ROIs of any home project. Prospective tenants love remodeled kitchens, and properties with a modernized space can often be rented for more every month. Kitchen remodels also increase your property value, which is useful if you’re planning on refinancing or selling your investment in the near future.
For your kitchen remodel to be successful, you need to maximize the value you get out of your upfront investment. As we all know, even the best renters can put stress on countertops and cabinets, so you want to find the sweet spot: don’t overspend on luxury materials, but don’t go to rock bottom and buy cheaply made stone or cabinets. Your cabinet and countertop choices will really make-or-break your remodel, but don’t forget about the finishing touches like lighting, paint, flooring, and more.
Once you’ve renovated the kitchen, your next best bet is the property’s master bathroom. In this space, styles have drastically changed over the past few decades: if your property’s bathroom looks like it belongs in the 1980s, it’s time for a facelift. Just as in the kitchen—or, really, any space of the property—you want to get the best bang-for-your-buck. Focus on the shower, vanity, flooring, and lighting. Unless absolutely necessary, skip changes to the layout or luxury upgrades to the bathtub—like most of us, tenants rarely use tubs.
Make your property more energy-efficient
At first glance, this one might be a head-scratcher. After all, most property managers and owners don’t include utilities in the rent. Why should you care if your renter has to pay more for electric or gas? As it turns out, an inefficient rental property can sow the seeds for a lot of potential trouble in the future. Here’s how.
Why invest in energy-efficiency?
When an air conditioner or furnace runs inefficiently, it’s doing more than just wasting energy. It’s also having to work harder to cool or heat the property. All that extra wear-and-tear is far from ideal. In the short-term, it could lead to a winter or summer breakdown, requiring you to call a service professional for repairs. Over the long haul—if not dealt with—it could drastically shorten the lifespan of your HVAC systems, meaning you have to pay for new ones that much sooner.
Something else to consider—and no less important—is how your renter feels about your inefficient property. High cooling and heating costs can drive a tenant to look elsewhere for housing when their lease is up, or to not run the furnace at all. If your property is in a part of the country with below-freezing temps, this could lead to significant problems like frozen pipes.
Improve your property’s efficiency
Ok, you’re convinced. Where do you start? There are dozens of ways to make your property more energy-efficient, ranging from replacing its windows to adding weatherstripping to doors. The great thing about efficiency improvements is that there’s a project for nearly every budget and every property. You don’t have to go all-out right now: start by adding attic insulation in the spring, and then move onto the next task in the fall.
You’ll see the results in the longevity of your HVAC systems and the satisfaction of your renters.
Care for your property and reap the rewards
So far, we’ve discussed upgrades and remodels. These are projects that, while nice, aren’t exactly essential. However, it’s also worth noting that you should deal with any critical replacement needs—a new garage door, a new roof, or a new air conditioner—before investing in any of these value-adding projects. When in doubt, talk to a locally trusted contractor and get their opinion on what needs to be done in the next few years to keep your investment in its best-possible condition.
To learn more about property upgrades with a long-term payoff, be sure to check out this new infographic: