Best Renovation Ideas for Rental Properties
Renovating a rental property is a great way to stay ahead of the competition and attract new tenants, but it’s essential to ensure that every dollar you spend is justified by the return on investment. Renovation costs can add up quickly, so it’s important to consider a few key questions: What’s your budget? How much value will the renovation add? And what are the best improvements for a rental property?
Making the right upgrades can maximise your return on your buy-to-let investment. If you spend wisely upfront, you’ll see the financial benefits down the line. It is also important to consider getting a quote for landlord insurance to ensure your investment is well-protected. This guide will walk you through the best renovations to increase rent and offer tips on managing renovation costs.
Where Do I Start with a Renovation Budget?
Renovating a rental property is as much about numbers as it is about aesthetics. One important factor to consider is rental yield, the amount of rent a property generates compared to its value. If a renovation isn’t going to increase value or generate more income in the long run, it might not be worth pursuing.
While being mindful of your budget is crucial, there are certain areas where skimping on quality can cost you more in the end. For example, avoid cutting corners on carpets, flooring, paints (opt for reputable brands and anti-mould paint for bathrooms), and bathroom fittings. These are areas where cheap options can wear out quickly, costing you more down the road.
Also, consider your timeline. The longer the renovation takes, the longer your property stays vacant, and that means lost income. Aim to schedule work right after the previous tenants move out, and try to minimise the time needed for renovations without rushing the professionals.
What Are the Best Renovations for Rental Properties?
In today’s competitive rental market, landlords are constantly looking for ways to make their properties stand out without breaking the bank. There are a few simple yet effective changes that can make a big difference.
Energy-Efficient Improvements
Improving a property’s energy efficiency is not only good for the environment but also attractive to eco-conscious tenants. Consider installing double or triple-glased windows, adding insulation, or upgrading to energy-efficient appliances. These changes can reduce utility bills and attract tenants who value sustainability.
Adding Bedrooms or Habitable Space
Adding an extra bedroom or usable space can significantly increase the value of your rental property. Loft conversions, extensions, or changing the layout to create more living space can make your property more appealing to larger families or groups of tenants, such as university students.
Garden Upgrades
Outdoor space is highly sought after, especially in urban areas. Consider landscaping your garden or adding features like a BBQ area, decking, or even a hot tub. These additions can make your property stand out and attract tenants looking for a property with great outdoor living options.
Kitchen and Bathroom Upgrades
It’s well-known that the kitchen and bathrooms are the money-makers of a property. If you’re renovating these rooms, be sure to balance cost with quality. One affordable update for a kitchen is to paint the cupboard units. Popular shades like greys and greens are durable and trendy, making them a smart choice over lighter neutrals.
Unique Selling Points
Think about what makes your property stand out. Maybe it has a cellar that could be converted into a wine cellar, or perhaps you could turn your property into a “smart home” by installing smart thermostats or door locks. These unique features could attract tenants who are looking for something special.
Managing Renovation Costs
Renovations can get expensive, so it’s crucial to hire reliable tradespeople who can deliver high-quality work and avoid shortcuts that could lead to higher costs later on. Get multiple quotes from contractors to ensure you’re getting a fair deal.
Renovation is all about balance, keeping things simple and clean while sticking to your budget. While it’s tempting to splurge on luxury upgrades, remember that your tenants won’t be as invested in the property as you are. Keep your changes practical, fresh, and cost-effective, and focus on improvements that will increase the appeal of your property.
Once you’ve completed your renovations, make sure to reassess your rent to reflect the increased value. Also, protect your investment by having the right landlord insurance in place to cover unexpected costs like fire, theft, or loss of rent.