The old saying goes "no risk, no reward," and owning a rental property can be quite the risk. Keeping tenants pleased can feel like walking a tightrope, and one of the key factors in doing so is making sure the property stays up to date and cared for. Remodeling your rental property may feel like even more of a risk, as the idea of spending money on renovations without reaping the rewards is off putting to say the least. However, remodeling could be just the thing your property needs to attract quality tenants, keep them happy, and maximize value. Here are a few things to consider.
1. The Tax Write-Off
This is probably the greatest reason there is for remodeling a rental place, as landlords are able to deduct many costs such as maintenance, repairs, and improvements or renovations. Remodels are treated differently by the IRS than repairs, so be sure to talk to your accountant to know the specifics. Remodeling generally requires you to depreciate changes over several years, while repairs can usually be deducted in full.
2. Avoid Over-Renovating
When renovating your rental space, go for cosmetic and aesthetic upgrades rather than massive changes and upheaval. Owning the property is about making money, after all, and the best way to maximize your return-on-investment is to make the house as cozy and livable as possible without breaking the bank. A good rule to follow is "make it a house instead of a home."
3. Focus On The Bathrooms And Kitchen
One of the main concerns of home buyers is the quality of the bathrooms and kitchen, and renters are no different. Since they're such a big factor for both buyers and renters, it's important to make sure they're practical and up to date. Another perk of upgrading these two rooms: if you plan to sell your property within the next decade, a nicely renovated kitchen or bathroom can give you an 80% return on investment. If you're only planning on upgrading a few rooms, that's where to start.
4. Minor Maintenance Can Make A Huge Difference
Not every item on your task list has to be a big overhaul; simple changes like a fresh coat of paint can make any property look brand new, and you should perform a thorough cleaning after every turnover. Another essential step is to replace any fixtures that need an upgrade. Things to look out for include door handles that stick, toilets that constantly run, old lighting, hardware that's lost its finish, drippy faucets, and blinds with missing slats. These are all inexpensive fixes that can go a long way in making sure your property looks appealing, and it also reduces the need for maintenance down the road.
The key to pleasing any future tenants isn't to provide them a super elegant, overly styled property; what renters really want is a comfortable, functional living space where they can enjoy spending their time. By being methodical when it comes to updating a rental property, you can be sure that you're delivering a quality property that's sure to satisfy any future renters. If you're considering a future remodel, or are even curious about what your options might be, give Divine Home Remodeling a call today for a free quote!