Like many people, I love watching HGTV. There is something very satisfying watching a dated house turn into a modern masterpiece in under 60 minutes! However, the reality of renovation is a bit different! When you are renovating your home, it can feel like the dust and debris will never end. But at the end of the weeks of disruption, you are left with a wonderful new space for you and your family.
How is renovating a rental property different than renovating your family home? Every home needs some care and maintenance to look its best. In an investment property, you need to be extra attentive to keeping costs in line and focus on spending money where it has the largest impact for your renters and in the overall value of the house. It is a business after all, so you need to think about return on your investment (see Turning Houses into Degrees: Student Rentals). If you are lucky your property may only need fresh paint and thorough cleaning, but if you want the best quality tenants it’s worth investing in other carefully chosen renovations. Improvements should wow your prospective tenants and lead to property appreciation, rather than just satisfy your individual preferences.
When you are starting to plan improvements to an investment property, try to picture your ideal renters (see Imaginary Friends: How to Understand Your Customers). For example, Bob and Suzy, aged 30-45. They have stable office or factory jobs and pay their rent on time. They enjoy having a nice place to entertain their friends, have fun and relax. For these tenants, the front entrance, living/dining rooms, kitchen, and bathrooms are most important. Renovation money should be focused here for the biggest impact. These are the rooms that their guests will see when they entertain, and where Bob and Suzy will spend much of their time at home. Here are a few ways you can make your property stand out while spending less money than most renovators:
Entrance and Curb Appeal: The exterior of your property should be clean and well maintained. If the landscape is well designed then prospective renters will assume the interior is too.
- Cut the grass and trim the trees and bushes. Plant a few seasonal flowers or plants at the front and add dark mulch for both function and appearance.
- Make sure you have good lighting for safety. Consider a pair of black sconces beside the door.
- Update the mailbox and house numbers. A simple black mailbox and easy to read numbers will create a great first impression.
- Paint the front door classic black or an eye-catching colour to invite people in!
- Wash the windows. This makes a big difference in how light and clean the property feels (see Growing an Entrepreneur).
Living & Dining Rooms: Paint is the simplest way to add value to your property. Choose a neutral colour to paint throughout, perhaps adding a light feature wall in the entertaining area. Update the lighting to elevate the space. You can often find fixtures on sale and install them yourself if you are handy. Consider adding some crown molding or wainscoting for a luxury look at a reasonable price.
Kitchen: Any money spent on the kitchen will likely be recouped in increased value in your property, as long as you keep expenses moderate. A clean and eye-catching kitchen can make all the difference in the impact for your prospective renters.
- Painting and adding a backsplash are both easy improvements to do by yourself. Simple white tiles with a mosaic strip accent are inexpensive but quickly transform the look of the kitchen.
- If the kitchen has worn vinyl flooring then inexpensive tiles will be an upgrade. You can often find inexpensive tiles on sale at big box stores. They still look great, especially when placed in a staggered pattern.
- Kitchen cabinets often can be painted or refaced rather than replaced. New hardware can make a big difference for a reasonable price.
- Add a new faucet with a pullout spray hose for convenience.
- Ceiling fans are also a simple upgrade that improves ventilation and lighting at the same time.
Bathrooms: Bathrooms are another area where you’ll recoup much of your investment. Start with fresh paint, pot lights and sconce lights by the mirror for a bright and welcoming space. You can also update the taps and towel rods to add sparkle. Floors and tiles can be updated with the same approach as the kitchen. A few value-added items to consider are a stylist shower curtain with a curved rod, and a shower wand rather than a spray nozzle.
For the rest of the house, keep it simple by cleaning and painting. Don’t spend a lot on improving the basement unless it is a second suite. Just keep it clean and bright. For bedrooms, make sure the closets are clean and have enough storage space. Make sure all the doors work. Handle any maintenance before your tenants move in save on hassles later on.
For example, a partner and I recently bought the home from a retired lady who had lived there for many years. It showed very well and the homeowner obviously had pride of ownership. The living room, kitchen and bathrooms were all nicely updated, but the garden had become overgrown. Some grass cutting, pruning and weeding improved the first impression of the house. The bedrooms also needed some maintenance. Once the furniture was moved out, we found a lot of wear and tear on the walls, paint drips on the floor, missing baseboards and the smell of smoke in the cupboards. Some patching of the drywall, new trim and a coat of paint throughout made a big difference. We also replaced the dirty and mismatched outlet covers, light switch plates and door knobs with clean and modern ones throughout the home. The biggest surprise was the evidence of mice in the basement. That took a call to an exterminator and some elbow grease (and breathing masks) to remedy! The purchase price accommodated repairs to the roof and some electrical work, which otherwise would have been red flags. It took a few weeks and a few thousand dollars to end up with a top-notch home that rented out quickly to great mother and son tenants.
For more examples and inspiration, check out some of my favorite books on home improvement. (You may notice some names from HGTV here!):
- Mike Holmes, Make It Right
- Scott McGillivray, How to Add Value to Your Home
- Jonathan & Drew Scott, Dream Home
- Ian Szabo, From Renos to Riches
What renovations have you done? Which ones do you feel were the most valuable? And what celebrity renovator provides you with the most inspiration?!