Anyone buying real estate must consider how much work, if any, is needed on the property. But renovation decisions on an investment property can have a direct impact on the amount of rent you can charge, the property’s market value and, ultimately, your overall earnings on the investment.
This means that, as with other aspects of real estate investing, you need to research your specific market, look at comparable properties and calculate your potential future earnings, ROI and other variables investors use to make informed decisions.
If you’re looking for a one-stop-shop solution for all of that info, consider partnering with one of Canada’s leading real estate investment companies. Renovations should only be done after careful research and calculations to ensure you aren’t wasting money on upgrades that won’t return. That being said, the home improvements below are tried and true when it comes to attracting interest from tenants and improving a home’s property value.
Kitchen & Bathroom Upgrades
Kitchens and bathrooms are two of the first places potential tenants look to ensure there is no mold and that the fixtures and appliances are new and in working order. The last thing they want is to have to wait on a landlord or property management company if either of those rooms goes down.
Kitchen upgrades are among the best home improvements projects for adding value to a home. An open, accessible kitchen with lots of natural light, a simple, clean look and modern appliances can make tenants fall in love with your home. Kitchen upgrades don’t have to be a complete remodel. You can get a completely new look by installing new cabinet doors, countertops or appliances.
Windows
If it’s been a while since the windows were installed, you might want to preemptively replace them with energy-efficient upgrades. Besides reducing energy bills, they provide good insulation against outside noise. And ensuring there aren’t any drafty windows can help you find and keep the right tenants.
On a related note, swapping out old appliances with energy-efficient replacements can add to your monthly investment income.
Curb Appeal
First impressions are lasting impressions, and a little work on the exterior goes a long way. The good news is that it doesn’t take much to boost a home’s curb appeal. You may want to swap out the front and garage doors and add window boxes, but simply power washing the exterior walls and resealing the driveway can make the exterior look new.
Of course, taking care of the lawn and laying down new mulch and trim is well worth the investment.
New Paint and Floors
Freshly painted, neutral-coloured walls make a room look spacier, and the entire house look like new. As for the floors, you may not want to install hardwood in a rental property, but any wall-to-wall carpeting should definitely be replaced as it traps dirt and can become a health hazard if it’s not vacuumed regularly.
Reference:
Mukhija, Vinit. “An analytical framework for urban upgrading: property rights, property values and physical attributes.” Habitat International 26.4 (2002): 553-570.
