Best Upgrades/ Rennovations to Increase Rent?

Question

We have a few condos in a complex that are older style units (20-30 years old), the rent varies in the complex we see some people remodeling the entire inside of 2b2b and getting $1600-1800 in rent while others that haven't made really any renovations or upgrades are renting for around $1-1.2k for 2b2b. The particular units we have don't have much remodeling or additions from the original inside. Still includes carpet in some areas, older wooden cabinets in kitchen, older appliances, bathrooms have older vanity's and countertops. What would be the best new additions to add after the tenant leaves to increase the rent? I was thinking replace the carpet or even parts of the tile with laminate/ vinyl flooring, possibly upgrading some of the old kitchen appliances, and maybe modernize the bathroom or kitchen cabinets/ countertops. Any ideas on upgrades to make the unit more modern and less old/ cheap looking to help increase the rent.

Drew Sygit · Answer

@Chris Geer many investors make the mistake of over or under improving their properties.

#1 RULE - maintain to the neighborhood! Okay, maybe 5-10% more, so your poperty rents faster, but that's it.

Anything more is a waste of money.

Recommend you do a thorough matrix of the competition: rents vs specific improvements.

Then analyze the cost of improvements.

Your challenge is how long to recoup your investment, so you can start actually profiting vs how long the improvements will last before the tenants trash them.

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Nathan Faselt · Answer

I agree with @Matthew Kwan for the upgrades as a base rule of thumb. Appliances can be good but not as much as the paint,  flooring , fixtures for ROI at least in our experience.

But also agree with @Bob Stevens that the math matters and you want to get rough idk or your ROI.

Without looking at the specifics, overall project, location and the cost and potential rents its hard to share great advice. We usually offer bronze, silver and gold package  with the estimated potential rents for owners considering renovations.  So you could try to do something similar of of a tiered investment and return.

Bob Stevens · Answer

Do the math, If you do upgrade's and spend 10k-15k, flooring, granite, appliances, well now you will get about 400 or so more per month. It will take 2+ years or more to recoup it. Is it worth it ?

Ricardo Hidalgo · Answer

Here are a few ideas for upgrades that could modernize your rental property and potentially increase its rental value:

• Update the kitchen: Upgrade old appliances, replace countertops, and add a tile backsplash.
• Install modern lighting fixtures: Replace old, outdated lighting fixtures with newer, more modern options.
• Add a fresh coat of paint: Choose a neutral, modern color that will appeal to potential renters.
• Upgrade the bathroom: Install new fixtures, replace old tiling, and add a new vanity.
• Update the flooring: Replace old, stained carpet with wood or vinyl flooring.
• Install smart home features: Add features like a smart thermostat or smart lighting to appeal to tech-savvy renters.
• Improve curb appeal: Add new landscaping, repaint the exterior, or add outdoor lighting to make the property look more attractive from the outside.

Remember to keep your target renter in mind when making upgrades, and make sure the cost of the upgrades will provide a reasonable return on investment

Bevin Bankston · Answer

There are many ways to make money in real estate. Rent is only one. In this scenario let's say you spend 15k to bring the condo to market standard. You would recoup that money in 3 years if you raise the rent $500. Then If you go to sell the condo in the future your equity will have increased and the construction has been paid off by your tenant.

However, If you are planning to sell the property and to get the most bang for your buck you decided to bring It up to market standards you will have to pay for that construction out of the sell. Instead have the tenants pay that for you while also acquiring equity for the future. I would review your short and long term goals to make this decision.

Nathan Gesner · Answer

It's hard to say without seeing your rentals and how they compare to others in the community. Vinyl plank is attractive, easier to clean, doesn't stain like carpet or hold odors, and should last much longer. Upgraded appliances are nice, but will they be nicer than the cabinets and counter?

You are getting $500 - $700 below market, but is that because your property is so tired compared to the competition or is it your failure to raise rents to their maximum?

Theresa Harris · Answer

Are you having trouble renting it or keeping tenants?  A lot also depends on the condition of things.  There are often small things you can do to update a place.I'd replace things as needed.  So if the carpet is stained or worn and at the end of its life, replace it with something more tenant proof.  If the appliances are breaking, then replace those.  Someone mentioned tub surrounds-those can be a pain and have lots going on behind them.  Make sure they properly installed and sealed.  Kitchen cabinets, are they in good working order, is the hardware dated, but the cabinets okay?  Change the hardware.

Eliott Elias · Answer

You can raise to what the market will allow. Bring it up to your highest comps quality.

Best Upgrades/ Rennovations to Increase Rent?

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