Periodically renovating your rental unit is necessary to ensure it remains competitive in the rental market. With the right upgrades and enhancements, you’ll be able to attract quality tenants, reduce your operating costs, and earn a tidy profit on your rental for many years.
However, careful research, planning, and budgeting are essential to see a hefty return on your investment. A renovation project can be costly, complex, and time-consuming, especially if you’ll be personally doing the work rather than hiring professionals. If you make too many mistakes along the way, you can do more harm than good, resulting in a lower bottom line for your rental business.
In this article, we’ll outline eight rental renovation tips to satisfy tenants and boost your rental income, but without breaking the bank.
Let’s get started!
Tip #1: Repair everything you can
In many cases, fixing something is far cheaper and more efficient than replacing it. Never start from scratch if there’s no need to do so. Investing some time in DIY repairs or hiring a professional to do them for you can instantly revitalize your rental while saving you a nice sum of money.
With the help of a few basic tools and spare parts, you can revive a broken fridge and other appliances rather than spending thousands of dollars to purchase new ones.
Is there a gaping hole in one of the walls? If so, you can use putty and spackle to make it disappear, along with a fresh coat of paint. You may need to install some extra drywall if the hole is large, but it’s still a pretty easy job overall.
Clogged drains are another issue you can quickly rectify using household items like wire hangers, plungers, baking soda, and vinegar. Here’s a video that shows you different ways to deal with a clogged drain:
Tip #2: Remodel the kitchen
Can’t decide which room deserves your attention first? If so, you almost can’t go wrong with starting with the kitchen.
Many renters place a lot of emphasis on the kitchen’s space, functionality, and look. It’s likely the most critical place they’ll evaluate when they arrive to view your rental. Not surprisingly, a kitchen filled with ancient appliances, chipped countertops, and loose cabinet doors won’t entice them to sign your lease agreement.
Since tenants place such a high value on the kitchen, even minor renovations will enable you to charge a higher monthly rent and boost your rentals’ value. According to a survey conducted by Royal Lepage in 2018, upgrading the kitchen is the surest way to increase the resale value of your property.
Here are some essential areas to address to improve the design and functionality of your kitchen:
- Add new handles, paint, and trim to the cabinets
- Replace the countertop
- Add a new sink and faucet
- Upgrade outdated appliances
- Install new light fixtures
Remember, there’s no need to spend a fortune on your rental kitchen to impress tenants. Most value practicality over style and fancy cosmetics, so don’t worry if you’re working with a small budget.
In fact, a minor kitchen renovation can yield a better return on investment than a large-scale one. According to data from Remodelling Magazine, the recoupable cost of a midrange remodelling is 71% compared to a major remodelling, which comes in at 56%. The data is from the U.S., but the returns are likely similar in Canada.
Tip #3: Revitalize the bathroom
Next to the kitchen, the bathroom is probably the most crucial place tenants will evaluate when they tour your property. A grimy and dated bathroom is one of the surest ways to repel tenants. If yours needs a significant overhaul, ensure it ranks high in your list of priorities.
As with the kitchen, determine the most practical and cost-effective way to refurbish different sections of your bathroom. Here’s a list of areas to focus on to get the most bang for your buck:
- Replace the flooring
- Install a new sink (or only the faucet if needed)
- Add new lighting fixtures
- Add more storage space
- Replace the shower head
A high-quality bathroom appeals to tenants as many see it as a place of relaxation and retreat. Think of a soothing bath after a stressful day at work. Doing a little work to emulate the atmosphere of a spa can go a long way in helping you generate extra rental income.
Tip #4: Make your rental attractive from the outside
First impressions are everything regarding how tenants view your property when they arrive for a showing. And the first thing they’ll set their eyes on is how it looks as they approach it. Therefore, make it look as attractive and inviting as possible.
The amount of work you’ll have to do will depend on the type of property you rent out. Naturally, a house with a front yard, garden, and fencing will require more time and effort to spruce up than an apartment.
Here are some ideas to help you get started:
- Plant new grass
- Pull out the weeds
- Replace worn-out fencing
- Paint the exterior of the property
- Replace any severely damaged paving stones
- Power wash the walls to eliminate dirt and stains
Ensure you don’t overdo it with the landscaping. Your goal is only to make your property look clean and presentable. Your tenants will want to incorporate their own ideas, such as planting a garden or adding decorative statues.
Tip #5: Upgrade the floors
No tenant likes to see dirty, scratched, cracked, and outdated flooring. So be sure to address your rental’s floors if you’ve neglected to do so for an extended period. Installing new, high-quality flooring can have a massive positive impact on how tenants perceive your property.
Do you have carpet in one or more of your rooms? If so, you can’t go wrong getting rid of it and replacing it with a much more durable and long-lasting material that’s also easy to maintain. Hardwood, laminate, or luxury vinyl tile are great options to explore.
Tip #6: Add the right amenities
You can select from an endless array of amenities for your rental. However, it’s best to narrow your choices to those that will satisfy the majority of tenants. Focus on making the living space enjoyable and convenient rather than extravagant.
Here are some amenities to consider:
- Wash and dryer unit. Adding a washer and dryer unit to your rental can save tenants time and money from travelling to a laundromat.
- Dishwasher. Like a washer and dryer unit, installing a dishwasher saves tenants the trouble of manually cleaning dishes and cookware.
- Air conditioning. Installing an A/C unit can score you big points with tenants who find summer heat waves unbearable.
- Extra storage space – provide ample storage space for your tenants to store their belongings. That way, they won’t need to leave them strewn across the property, resulting in needless clutter.
Fencing – a new fence surrounding your rental unit is a solid investment, as it provides tenants with privacy and security. It also makes your property pet-friendly, preventing a tenant’s dog from wandering into adjacent properties.
Tip #7: Choose your materials wisely
Knowing which materials to use is just as critical as knowing which areas of your rental unit to renovate.
When making your choices, you should keep three things in mind:
- Cost. Always strive to spend the least amount of money possible. By overspending, you won’t realize a healthy return on your investment. But being too frugal is not advisable either, as cheap materials will wear out quickly, leading to frequent replacements.
- Durability and maintenance. Ideally, the materials you select should last many years without needing to be replaced and require little upkeep.
- Tenants’ preferences. Put yourself into the mind of your perfect tenant. Would they be happy with the materials you chose for the floor, countertops, cabinets, and other areas of your rental?
When possible, strive to use materials that satisfy all three criteria. In doing so, you’ll be able to save money, spend less time on repairs and maintenance, and attract more tenants.
But, sometimes you’ll need to make trade-offs, primarily if you’re operating on a tight budget.
For example, you may decide that installing hardwood throughout your rental unit is the way to go. And you wouldn’t be wrong: hardwood is easy to maintain, cost-effective and popular among renters.
However, more affordable options are available, like laminate or vinyl tiles – and both are stable and visually pleasing. Choosing one of these materials over hardwood may be more prudent to keep your costs low.
The same concept applies to kitchen countertops. Marble is a tempting choice because it has a luxurious appearance and is heat resistant. But this material is costly and requires more maintenance. For renters, a laminate countertop will usually suffice.
Tip #8: Keep things simple and timeless
When it comes to cosmetic upgrades and touch-ups, don’t overcomplicate things.
It’s impossible to know in advance the preferences of your upcoming tenant. So, your safest bet is to make your unit appealing to as wide a range of people as possible.
Tenants will want to decorate the unit based on their unique style when they move in. Therefore, avoid fancy and extravagant colours, styles, and patterns. Be conservative in your choices and provide your tenants with a blank canvas to work with.
Choose a single colour for each room’s walls to keep things simple and consistent. Stick to off-white colours like cream, beige, ivory, vanilla, or pale shades of grey – they blend in well with other colours and complement a wide range of design themes.
The same concept applies to light fixtures, backsplash, flooring, curtains, and appliances – choose colours and textures that are neutral and subtle.
One final tip: Focus more on timeless designs – don’t blindly chase trends. That way, you won’t need to replace outdated fixtures, furniture, décor, etc. constantly.
Here’s a video with some helpful tips about achieving a timeless look in your property:
Our Final Thoughts
Your goal with any rental renovation should be to increase the value of your property. By upgrading and modernizing your rental, you can charge a higher rent price and increase its appeal among tenants.
When planning a renovation, always approach the project with a business mindset and focus on financial figures. This concept applies to both short-term and long-term rentals.
Ask yourself: will the money I spend on renovations enable me to generate a higher monthly rental income? And if so, how long will it take to recoup my investment.
Also, keep in mind tenants’ needs, preferences, and expectations. While you may be brimming with elaborate and extravagant design ideas, always put the needs of your tenants ahead of your own. After all, they’ll be the ones living on the property, not you. So ensure you view each aspect of your renovation project from their perspective.
Once your renovation is complete, the next step is to list your rental property online and find a quality tenant. If you’ve spent your time and money wisely, you should have no problem garnering attention from plenty of renters.
However, even with the proper screening and due diligence, things can head south. Your tenant may lose their job or need to cover a mountain of medical bills, leaving them strapped for cash. As a result, they may default on their rent payments, and your income stream will dry up. Not an ideal scenario, especially after you spent a ton of time and money revamping your rental!
SingleKey offers landlords the Rent Guarantee program for unforeseen situations such as this. By enrolling in the program, you’ll receive rental income payments for up to 12 months should your tenant suddenly stop paying on the first of the month. You’ll also receive reimbursement for up to $10,000 in property damage if you have the misfortune of dealing with a destructive tenant.