Around 30% of Americans rent the houses they live in, and this number could increase as property prices continue to escalate. So, now’s a good time for landlords to make the most of their investment properties. Renovating a rental property can help cut your property maintenance costs while increasing your rental income. While renovations will certainly increase the value of your rental property, you won’t see an instant ROI unless you sell it.
If you continue with long-term rentals, you’ll have to wait around ten years to see returns on renovations to rental property.
There are the steps you need to take to ensure that you end up profiting from your efforts.
1. Assess the Current State of the Property
Before you undertake investment property renovations, you need to take an honest inventory of its current state of disrepair. Walk around the house or apartment and make a note of every component you see.
Categorize these items into the following columns:
- Ready for rental
- Partial repair
You can ask a contractor to provide an estimate for the cost to repair these items.
2. Work Out Your Budget
Decide which items will allow you to increase your rent. Some things like structural improvements to the roof might stand out as essential if you want to rent out the property at all.
Other cosmetic items will attract more renters prepared to pay a higher price. Depending on your budget, you might need to cut down on some of these items.
Remember, not all renovations require a vacant property. You can complete small repairs and replacements with your tenants in place. You can do these later if your budget doesn’t allow for them now.
3. Find a Reputable Contractor
If you don’t have a regular contractor, you’ll need to find a new one. You can ask around for recommendations from fellow landlords and research reviews and ratings to help you find the best one.
It’s vital to hire a licensed, insured, and bonded contractor. The more experience they have, the better.
An experienced contractor might cost a little more, but they’re likely to guarantee their workmanship and their expertise will pay off down the line.
4. Cover Yourself for Renovations to Rental Property
According to Property Insurance HQ, additional renovation insurance is essential to protect you from losses while the property is vacant.
A lot can go wrong while you’re revamping your property. Theft, damages caused during construction, and accidents are just some of the problems common to this kind of project.
You’re already paying money to upgrade your property, don’t end up having to pay more due to circumstances.
5. Manage Your Project Like a Pro
You must stay on top of your rental renovation for the best results. Set a realistic schedule and hold your contractor to it.
Regular inspections and a final walk-through are essential to ensure your renovations end up as you envisaged them.
Make the Most of Your Real Estate Investments
When you follow these tips about renovations to rental property, you’re assured of extra income and happy tenants. Start planning your rental property upgrades today.
Are you keen to master the art of maximizing profits from investment properties? Browse our blog for more top real estate tips.