What are the most cost-effective add-ons/repairs to raise rent???

Question

I just had a tenant move out of one of the units in my duplexes (in Kansas City if that matters), and it looks like there is some repair work that needs to be done on the cabinets, paint, carpet, door handles, etc.

While I certainly will take care of those issues, I also want to use this opportunity to do things inside the rental that would increase rent.... but I'm not sure where my money would be best spent.

I would love to hear what BP thinks are the best things to focus on when trying to fix things that could cause a higher rent value in the tenants eyes?

What's the order of importance usually?

And do you use any specific material for certain items?

Cooper Bert · Answer

I'd suggest the following in this order:

MANDATORY

• Repair anything that doesn't work - Plumbing, Electric, HVAC, windows, doors, cabinets, drawers, appliances, etc. Example - Drawers that won't stay on track.
• Get rid of any "smells" in the property.  Find out what smells and remediate it.  This is too often overlooked and is one of the biggest turn-offs to potential tenants. Example - Mildew shower curtain.
• Replace anything that looks worn & used.  Example - laminate counter edge that is peeling or bubbling. 
• Clean everything that you haven't replaced.  If you can't make something look clean, replace it.  Example - yellowing light switch covers.
• Clean-up your curb appeal.  Clean-up the landscaping, powerwash everything on the exterior.

OPTIONAL but Recommended

• Paint all walls & ceilings unless it already looks like it's new paint.
• Replace any carpet that isn't new  with decent laminate flooring.  Your property will look better, smell better and your long term CapEx will be lower.
• Check your CapEx replacement schedule and get it up to date.  Example - replace the 20 year old brown refrigerator with the rounded corners!

DISCRETIONARY and Worth it

• Update your appliances to the same level as your local competition.  If they have stainless, get stainless.  If they have a side-by-side refrig, get one.
• Increase kitchen counter space if possible.  As stated previously, add an island if possible.  Worst case, add a portable island cart to the center of the kitchen IF it doesn't crowd the space.
• Update your cabinets if they look old.  Replace the cabinet pulls, paint the cabinets and/or replace the doors.
• Update your countertops to the same level as your local competition.  Get 2cm prefab granite if they have granite or quartz.  Get the faux granite Formica or polished concrete overlay if you can't justify real solid stone.
• Update your bathroom fixtures.  If you have any fixtures that are not bright white, replace them.
• Add more lighting, use LED, and make it all the same color (Soft, Daylight, etc.).  More light makes everything less dreary. Don't forget outside lighting, landscape lighting & security lighting.

GO "ALL IN"

If you feel especially confident in the long term returns from your property AND your numbers make sense:

• Consider changing your floorplan to make it more open.  The smaller the unit, the more open it needs to be.
• Upgrade the things that will save on utilities.  Upgrade windows, doors, HVAC units, low-flow toilets, shower heads, light bulbs & fixtures to LED, and appliances.
• Brighten the outside.  Seal all asphalt, resurface all concrete, tuck-point masonry, patch & skim coat all stucko, bleach all siding, paint the trim and add fertilizer to make the grass greener.

Establish a budget for your renewal project and keep going till you are out of budget.

Good luck!

Billie Miller · Answer

Make it clean! A tenant will be much more forgiving of laminate countertops and builder grade finishes if the space is easy to clean. Keep it simple, but clean. Here are some easy things we've done that don't require a complete gut:

• repaint or replace baseboards, window trim, door casings
• matching and freshly painted interior doors
• matching hardware throughout entire unit (doorknobs, lighting fixtures, plumbing fixtures, etc.) and matching as in all the same metal 
• painted cabinets
• fix sink base cabinets that have water damage
• paint closets
• new blinds
• new toilet (saves on your water bill too)
• clean up the yard

Chris T. · Answer

@Rohan J.

Your tenant pool may decrease if basic repairs are not made such as dirty carpet, scratch up walls, broken tiles etc.

Every little thing contributes to the first impression a tenant has on your unit. Just like selling a house, kitchen and bathrooms are key. To get a higher ROI on your repairs, I would say flooring, paint and cleanliness! If you do flooring, go with laminate/tiles/hardwood instead of carpet. It will cost more but will last longer than carpet.

If you want higher rent, then you need to see your competition in your area. Make yours nicer than theirs, then you can justify the higher rent and your quality of tenants should improve as well.

Tyler Ansell · Answer

A fresh coat of paint and some new hardware/light fixtures will make it pop. Hop on pinterest and poke around...there's tons of DIY stuff you can tackle in a weekend that might make someone be willing to pay more.

Mary Ann Aulbur · Answer

Bright, clean and storage.  Paint walls - light, neutral color.  Clean windows.  Add lights (wall and ceiling) and turn them on when showing.  Add simple storage with plywood and 2x4's or 2x2's then paint.  Enclose these behind doors or even curtains.  In lower end rentals, storage is hard to find.  Sometimes clean is hard to find.  Big closets are also hard to find.

Fencing in a B or C neighborhood is a plus for privacy and safety but just the back yard is usually enough.

If you allow pets, it can be a wise, money generating move or a very costly mistake.  So be careful, check their current residence and put safeguards in place.

Paul Caputo · Answer

I used to sell carpet and getting rid of it will solve a big headache. When seeing a new place for the first time people look around then look down almost immediately. Carpets get dirty and gross pretty easily especially in a rental and the carpet manufacturers will not warranty "residential carpet" in a rental property, it has to be specifically warranted for commercial or rental property and that's usually only really thin hard loop carpet that you see in office buildings. So even though the carpet is cheaper you're gonna have to keep replacing it every few years to attract good tenants.

Throw down some strong laminate or vinyl planks or sheets (I'd probably do vinyl, if it's strong it'll last longer than laminate and vinyl doesn't care if it gets wet so easy cleanup!) and you won't have to worry about the floor getting messed up again. Also If you do a laminate or vinyl plank floor if one board gets messed up it can be replaced without redoing the whole floor, bad carpet stains and you have to replace the whole room for it to look ok, and if the carpet doesn't all match it looks bad. Also if you allow pets it's a no brainer to get rid of the carpet since the urine smell never goes away when it gets down into the padding, but with vinyl that's easy cleanup.

I'd stay away from solid hardwood floors in a rental. It looks great initially and is very strong, but a tenant can easily scratch it and mess it up and it's generally the most expensive floor you can buy. Then you have to refinish it every so often which can be half the price of the initial floor investment. Also if it's floating laminate, vinyl planks or engineered hardwood it qualifies for accelerated depreciation over 5 years while a solid nailed down hardwood in a rental is depreciated over 27.5 years.

Touching up the paint, cabinets and fixtures are all helpful in making it rent ready, but the floor is very important. Most of the other stuff can be done fairly easily, but the floor will take the most work unless you're doing serious remodeling like a new kitchen or bathroom.

On your improvements and repairs make sure you keep all your receipts and give them to your CPA. Some of that could be eligible to be fully expensed while some would have to be applied to your cost basis and depreciated with the building.

Cliff Harrison · Answer

Do your units have w/d connections, dishwasher, and disposals?   If you have the w/d connection, you can offer to tenant applicants to provide a W/D for extra rent (over what was advertised).  You can also offer to add dishwasher, or even fenced in backyard (or portion of the backyard) if the tenant has a dog (and you allow pets).  As an example, in one duplex unit, I got a $70 rent increase and a two year lease commitment in exchange for adding a chain link fence 25x30 which only cost $850 to have installed, you have tax treatment options for depreciation or expense on it,  and it should last a long time.  I ask for feedback at showings if I don't get an application, what were you looking for that you don't see?

Andrew Syrios · Answer

Some really small things that just improve the appearance (and smell for that matter) of the property can really help. I wrote an article on this you may find interesting: https://www.biggerpockets.com/renewsblog/13-ways-increase-rent-add-rental-property/

Colleen F. · Answer

Kitchens and baths that have a more current look.  Replacing carpet with laminate would probably be my thoughts  based on your description.  For your units not looking dated will give you the best bang for the buck.  If you have not much countertop and you add an island that is usually a plus. Replacing a tired vanity in the bathroom, even just painting it can help.

Rohan J. · Answer

@Chris T. good points. I'm certainly going to take care of the basic repairs - I'm just seeing if there's anything else that isn't too expensive, and would increase rent. I like your note about kitchens and bathrooms.

I am hoping to make it look more "modern" with the colors/styles. Don't want to overdo it though because it is still a C+ neighborhood and I don't think each side would rent for more than $600-650 (currently rented for $575).

What are the most cost-effective add-ons/repairs to raise rent???

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