For the greatest return on your rental property investment, you need to develop a reliable and long-term property renovation budget. Although properties being rented out do not usually require a complete “flip” renovation, it is important to know where to allocate your property renovation budget to get the greatest effect on the Rockledge market in increasing rent value.
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
After you determine the parts of your property that fall under these percentages, consider the total worth of the property and take a percentage of it. For example, if you have a $40,000 property renovation budget based on 10% of a $400,000 property value, it should look like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
Keep in mind that each adjustment should factor in your target market and what will maximize value for your future Rockledge tenants. Make a list of each room and feature of your property and use your allocated property renovation budget to figure out what needs the most improvement (you do not need to use the total budget).
A number of property investors would want to maximize their property renovation budget by redoing the whole kitchen or bathroom; however, it is essential to keep costs as low as possible and find what needs the most work. For instance, you could keep the main kitchen and just replace the floors, sink, and faucet, add new appliances, and paint the cabinet doors or replace the handles. In general, bathrooms can stay the same with their walls and layout, but you can place a new shower head or heads, toilet, or vanity based on your vision for a more clean and modern feel. If there are things from your property that you do not want to keep, consider utilizing a second-hand market by selling them to attain more funds for adding new items. Alternatively, to cover costs, some Rockledge investors can buy from the second-hand market or a community online classifieds section to get lower cost items for kitchens, bathtubs, windows, and doors.
Generally, a full renovation with your Rockledge property renovation budget will most probably always add additional value. However, overcapitalizing can be a factor, especially when rental values can alter based on the market. As such, ensure that your budget fits your goals and that you do not do expensive renovations that are not needed to attract higher rent.
In determining the most important items to focus on with your property renovation budget, we have observed that these items tend to attract a higher rent value:
- Updating the kitchen and bathroom to be more modern
- Putting in blinds/window dressings and floor coverings
- Including privacy features
- Outdoor living areas and fencing
- Ease of access to rooms
- Natural lighting in the home
The most vital factor in renting to Rockledge residents is to give the best presentation that you can to make a positive impression with your potential residents that will last even after they decide to live in your property. Moreover, prior to contacting you, potential renters will often drive by the property itself to view its condition. If they are impressed, then they will contact you for more info. If not, they may move on to the next rental property. As such, curb appeal can aid in attracting and retaining quality residents. An effectively planned property renovation budget will result in thorough consideration of all the costs necessary to allocate the right resources and time to what matters most to your future residents.