​Property Upgrades You Should Avoid

Upgrading your investment property is generally a good idea. Installing energy-efficient appliances or adding much-needed storage space can go a long way in increasing the value of your home and making it more attractive to renters - netting you a much bigger profit in the long run. However, not all upgrades are created equal. In fact, there are a few you’ll definitely want to avoid, as they can actually detract from your investment, either by scaring off renters or costing you much more than you bargained for. Here are the top 5 “upgrades” to steer clear of with an investment property.

1. Changing the layout to something “non-standard.” Most tenants like to keep it simple when it comes to their living space - kitchen, dining and living areas, two to three bedrooms, and one or two bathrooms. When you do something to change this layout, such as blow out a wall between two rooms to create one huge room, you run the risk of losing marketability of your property. Any type of room conversion should be carefully considered to ensure that it will truly add value to your investment.
2. Over-improving the property. It can be tempting to turn a run-of-the-mill home into something spectacular - after all, who doesn’t love a beautiful transformation like the ones we see on all the home improvement reality shows? Except this isn’t YOUR home, it’s your investment property, and pouring money into beautiful upgrades just won’t pay off in the end. Over-improving the property with high-end finishes and the latest design trends may look fabulous, and it may even be a good selling point for tenants, but these upgrades just won’t give you the ROI you want.
3. Lots of landscaping. Planting some bushes and flowers are a great way to boost your rental home’s curb appeal, and we absolutely recommend doing a bit of landscaping - just be sure you know when to stop planting. Unless you love tending to lawn maintenance or paying a crew to do it, it’s best to keep the landscaping design fairly simple. Overdoing it with extensive landscaping not only comes with a steep initial cost, but there’s also the long term maintenance that must be provided - and if you neglect it, there goes all that curb appeal you worked so hard to get.
4. Carpet, carpet, and more carpet. There’s nothing wrong with installing new carpet in an investment property. In fact, we do it all the time! However, the key is in knowing what to carpet. We’ve seen houses with true wall-to-wall carpet - including in the kitchen and bathroom. This is a huge turn-off to most people, who find the ick factor associated with carpet in these areas to be a deal breaker. Instead of dropping cash on new carpet, consider other flooring options, such as linoleum or ceramic tile, especially in the kitchen and bathroom. Even if it involves more expense upfront, you’ll save tons in long term cleaning and maintenance, and your property will be more attractive to tenants.
5. Customized designs. Most people hear the word “custom” and think “Wow! Fancy!” While this may be true in many cases, not everyone’s idea of fancy is the same - which is why you have to be extremely careful with any customized designs you’re thinking of adding to your property. You may think installing built-ins in a master suite will create tons of valuable storage (and it very well may), but these additions are very unlikely to amount to any added value in the end.

There’s much to be said for investment property upgrades, and many of them can pay off handsomely for you. However, any type of upgrade should be carefully considered in terms of ROI, and if there’s even a question about whether or not something will pay off, it might be best to table it - especially if it’s on the list above.