Should You Renovate Before Renting Out Your Property?
As a property owner, you constantly have to put yourself in the mind of your tenants. When you look at your property, what features stick out? What kind of appeal does it have? At a glance, does the property seem dated? When it comes time to list the rental property, do you spend money on renovations first or just put it on the market as is?
Some improvements can make a property easier to rent and maintain, but over-renovating can eat into your return without meaningfully increasing rental income. If you are wondering whether you should renovate your Augusta-area rental property before you list it, follow these recommendations from our property management team.
Does Your Rental Property Actually Need Renovations?
When you consider renovating a rental property, the first thing you need to do is establish the distinction between a need and a want.
Repairs Before Upgrades
This is where you should be thinking as a tenant. When you look around, do the walls need a fresh, new coat of paint or are your appliances on their last limb? Should you install newer, nicer lighting fixtures or do you need to repair or replace chipped and scratched flooring first?
Tenants want to move into a property where they don’t foresee multiple maintenance requests. If they notice appliances that are falling apart, signs of leaks, or old flooring, on top of frequent turnover in listing history, you will likely have a vacant property for longer than you anticipate. Making the right repairs at the right time can even reduce recurring maintenance costs down the road.
Outdated Does Not Mean Unrentable
We do want to note that just because things in your rental are “outdated” does not mean your property is unrentable. If the kitchen in your property screams 2010 and photographs accordingly, you do not have to redo the entire kitchen (which typically falls around 15 percent of your home’s market value!). Instead of spending thousands of dollars on new cabinets and shiny appliances, consider cheaper options like fresh, neutral paint colors and better lighting.
As long as the features of your property are functional, clean, and in good condition, you can market your property at a competitive rate. Everything does not have to be shiny and new to appeal to prospective tenants.
Which Renovations Make a Rental More Appealing?
If you have the budget and see no need for major repairs, there are a few renovations you can focus on that will make your rental property more visually appealing.
Focus on High-Impact Renovations
Unless you are replacing flooring or repainting, there is only so much that you can do for living rooms and bedrooms. Once a tenant moves in, those rooms will be decorated to their liking anyways.
The Bureau of Labor Statistics states that Americans spend most of their time cooking and eating in the kitchen and attending to personal care in the bathroom. These parts of the home have a bigger “wow” factor because, while you can decorate them, you mostly get what you see.
That being said, if you choose to do renovations on your rental property, it is likely more beneficial to focus on things like bathroom storage, kitchen storage, appliances, hardware, etc. Also keep in mind that the materials and finishes you choose should be durable enough to withstand multiple tenancies rather than simply look good immediately after installation.
Avoid Over-Improving For Your Market
If you are wondering how your rental compares to other nearby rentals, go look! Don’t be afraid to check other listings online. This can give you a better sense of what renters expect in different neighborhoods and which features may help a property stand out. You don’t want to over-improve your Augusta, Evans, or North Augusta area rental property if the local market will not support enough additional rent to justify the expense.
Again, when looking at these other properties, pay particular attention to areas like the kitchen and bathrooms. Another tip: what does the outside of the home look like? You can update your rental’s curb appeal for a low price if you do not have the budget to do any major renovations. A few nice looking shrubs and pavers can go a long way!
Renovate With Your Investment Goals in Mind
The goal is not to create the nicest rental property in the Augusta area. It is to create a safe, functional, appealing property that fits in its market, supports your investment, and supports the return you are working toward.
A local property management company can help owners understand what renters in their specific market expect, which improvements could make the property more competitive, and where additional spending may not be worthwhile. If you are preparing an Augusta-area property for the rental market, contact Sherman & Hemstreet. Our team can help you determine which improvements make sense before your property is listed.